‘Breaking the rules’ as deviation and transformation

November 24, 2020

I’ve been doing some more reading recently in the theoretical space of formal institutional economics – meaning scholars thinking about what kind of formal (often though not always game-theoretic) resources we can best use to model and analyse institutions.

Within this literature, it’s fairly common to typologise approaches to thinking about institutions into two broad traditions.  On the one hand, there are scholars who define institutions as the ‘rules of the game’ that structure political-economic life.  In a modelling context, an institution would here be specified as the parameters and incentives within which game-theoretic agents make their strategic decisions.  On the other hand, there are scholars who define institutions as strategic equilibria within a formal ‘game’.  Here the paradigmatic examples are coordination games, in which agents achieve a stable equilibrium – understood as a normative convention – which is stable because, once established, it is in the interests of all agents to retain this ‘cultural consensus’.  There are of course other ways to typologise the literature, but let’s go with this for now.

The next question is: what is the relationship between these two ways of understanding institutions?  And one way to understand that relationship is to see ‘the rules of the game’ as themselves emergent properties of strategic equilibria.  From this perspective, specifying the rules of any given game ‘exogenously’ is just reifying for analytic convenience a phenomenon that can itself be modelled as an emergent property of agents’ strategic play within a different, more ‘expansive’ game.

OK.  Let’s say we accept this broad outline (which I broadly do).  But if we take it that rules emerge from social practice (and are not merely a guide or constraint for social practice), this raises a set of questions about how to understand instances of social practice (or of strategic play within a game) that appear to depart from a rule.

Such practices can be understood as simply deviant – perhaps as self-interested and opportunistic departures from cooperative play, perhaps as mistakes, perhaps as ‘characterological’ in some way, but in any case as clear deviations from the accepted consensus norm.

But given that rules are themselves shaped by the reality of practice, it may be that an action that some social actors interpret as a deviation from a rule, is interpreted by others as in conformity with the rule.  In this scenario, the disagreement over whether an action is in conformity with the rule, is a disagreement over the substance of the rule

The working out of such disagreements is how rules are specified.  Here a Wittgensteinian or Brandomian perspective sheds some light: because no rule can ever be fully specified, the way in which rules become further specified is via the community reaction to new actions that could in principle be interpreted as being either in accordance with or in contravention of a rule.  Brandom uses the analogy of common law legal judgements, in which new judgements aim to be grounded in precedent, but also themselves form new precedent for future judges.

At the same time, the working out of such disagreements may do more than further ‘specify’ or ‘clarify’ a norm (or rule) – it may specify the norm in a way that can reasonably be seen as transforming the substance of the norm itself.  A new specification of a rule, in other words, may be a new equilibrium which shifts the consensus of the game, and in turn shifts the rules of ‘subsidiary’ games.  This may happen in a ‘revolutionary’ way, in which an entirely new equilibrium is established after a period of normative upheaval.  But it may also happen in an ‘evolutionary’ way, wherein the ‘rules of the game’ gradually shift over time, by way of incremental ‘deviations’ that are then transformed into part of the subtly different new norm.  Linguistic drift is an example of this transformative collective practice. 

And of course in practice some combination of these things often happens.  For example – the role of subcultures in the transformation of larger cultural spaces, with a subculture as a location of normative innovation from which new norms can then (potentially) disseminate (or not).  Is a subcultural space of this kind a deviation from the larger normative space, a simple alternative to the larger normative space, or the bleeding edge of the large normative space’s ongoing self-transformation?  Which of these attitudes you adopt, of course, depends on your political and social perspective – but there is no ‘right’ answer – this question can only be settled in political-cultural practice, by the process of normative contestation, rejection, and consensus-formation that is a significant part of our political, economic, and cultural life.

Anyway, I’m not suggesting that I’m saying anything particularly innovative here – these are pretty familiar remarks about the ways in which norms emerge and transform in social practice.  But I want to foreground these kinds of considerations as I think about how to formally model institutional equilibria and dynamics.  I think that at least some institutional economics would benefit from more emphasis on this category of phenomena, when thinking about how the ‘rules of the game’ are made and changed.

One Response to “‘Breaking the rules’ as deviation and transformation”

  1. Phil Says:

    The interesting thing for me is the ‘thingness’ of rules. Rules (as I see it, coming to it from a broadly phenomenological background) are nothing more than normatively-valued regularities, never exhaustively specified (let alone defined a priori). As they’re both sustained and transformed through social practice. they can and do change if enough people (in the relevant, authoritative community of practice) want them to – and if, in a given period, they don’t change, that’s also expressive of what that community of practice collectively wants. The question then is, what’s the difference between “the law is X, as we authoritative people all agree, and you should therefore do Y” and “we authoritative people all agree that you should do Y”? Intuitively it seems that there is a very big difference between the two, but it’s not clear how that’s grounded.

    My take – which I should say is an unfashionable minority position within legal philosophy – is that we’re responding to formal qualities of the law as a system, or rather to the formal qualities which the law’s community of practice aspires to realise in the law as a system of rules. Which is to say, qualities like coherence, universality, knowability and justifiability (including openness to challenge; this goes back to the point about how deviations from a rule at time T may feed into the rule as it’s understood at time T+1). And perhaps this generalises to some extent; perhaps any comprehensible rule, qua rule, bespeaks an aspiration to universality etc.

    Interesting stuff, anyway, and your post reminds me that I really ought to get back to thinking about it.


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