Podcast
Questions and Answers
What is the primary mechanism through which culture influences individual behavior?
What is the primary mechanism through which culture influences individual behavior?
- The transmission of knowledge, values, and other behavioral factors from one generation to the next. (correct)
- Direct enforcement of rules by authority figures.
- Genetic predispositions that dictate social norms.
- Economic incentives that encourage conformity to societal expectations.
How does the cultural filter, as mentioned in the passage, contribute to the continuity of informal constraints in society?
How does the cultural filter, as mentioned in the passage, contribute to the continuity of informal constraints in society?
- By providing a framework for encoding and interpreting information which carries past solutions to present exchange problems. (correct)
- By creating a system of legal precedents that formalize past behaviors.
- By promoting innovation and encouraging deviation from traditional practices.
- By ensuring that all members of society have equal access to information.
What was Evans-Pritchard's main observation regarding the Nuer society, as highlighted by Robert Bates?
What was Evans-Pritchard's main observation regarding the Nuer society, as highlighted by Robert Bates?
- The Nuer were primarily motivated by external threats from neighboring tribes.
- The Nuer were constantly engaged in internal conflicts and theft.
- The Nuer relied heavily on a formal legal system to maintain order.
- Despite the potential for disorder, the Nuer tended to live in relative harmony due to unwritten rules. (correct)
How does the passage connect the idea of cultural transmission with the functioning of the human brain?
How does the passage connect the idea of cultural transmission with the functioning of the human brain?
What is the crucial element that necessitates institutions to structure human interactions, as indicated in the text?
What is the crucial element that necessitates institutions to structure human interactions, as indicated in the text?
From what source do informal constraints originate?
From what source do informal constraints originate?
Based on the context, how does culture act as a 'language-based conceptual framework'?
Based on the context, how does culture act as a 'language-based conceptual framework'?
Which area of study does the text suggest can benefit from anthropological literature on stateless societies?
Which area of study does the text suggest can benefit from anthropological literature on stateless societies?
According to Bates' study of Kenya, what key factor influences the evolving institutional constraints during a society's transition to a market economy?
According to Bates' study of Kenya, what key factor influences the evolving institutional constraints during a society's transition to a market economy?
What was the primary finding of Robert Ellickson's field study in Shasta County, California, regarding dispute resolution?
What was the primary finding of Robert Ellickson's field study in Shasta County, California, regarding dispute resolution?
Which of the following is NOT identified as a characteristic of informal constraints?
Which of the following is NOT identified as a characteristic of informal constraints?
According to Shepsle and Weingast's study, what primarily explains the power of congressional committees beyond formal rules?
According to Shepsle and Weingast's study, what primarily explains the power of congressional committees beyond formal rules?
What does Axelrod's reference to Alexander Hamilton's reflections before his duel with Aaron Burr illustrate?
What does Axelrod's reference to Alexander Hamilton's reflections before his duel with Aaron Burr illustrate?
How do informal constraints relate to formal rules in a society?
How do informal constraints relate to formal rules in a society?
What role do repeated human interactions play in the development of informal constraints?
What role do repeated human interactions play in the development of informal constraints?
Which scenario best illustrates how informal constraints can modify formal rules?
Which scenario best illustrates how informal constraints can modify formal rules?
According to Howard Margolis's dual utility model, what primarily governs an individual's 'S preferences'?
According to Howard Margolis's dual utility model, what primarily governs an individual's 'S preferences'?
In Robert Sugden's argument, under what condition does a convention acquire moral force?
In Robert Sugden's argument, under what condition does a convention acquire moral force?
What is a key role of the mind's information processing, according to the text?
What is a key role of the mind's information processing, according to the text?
According to the chapter, how does culture influence informal constraints?
According to the chapter, how does culture influence informal constraints?
What is stated about the impact of norms?
What is stated about the impact of norms?
What is suggested about modeling wealth-maximizing norms?
What is suggested about modeling wealth-maximizing norms?
What is the 'morality of cooperation' as described by Sugden primarily based on?
What is the 'morality of cooperation' as described by Sugden primarily based on?
In the context of decision-making, which of the following does the text suggest informal constraints primarily affect?
In the context of decision-making, which of the following does the text suggest informal constraints primarily affect?
Which factor most significantly influences the incremental evolution of institutions, leading to path dependence?
Which factor most significantly influences the incremental evolution of institutions, leading to path dependence?
What outcome typically arises from the tension between newly altered formal rules and the persistence of existing informal constraints?
What outcome typically arises from the tension between newly altered formal rules and the persistence of existing informal constraints?
How does the complexity of a society typically affect the formalization of constraints?
How does the complexity of a society typically affect the formalization of constraints?
What role has technological change played in the development of formal constraints?
What role has technological change played in the development of formal constraints?
How do formal rules generally interact with informal constraints in a society?
How do formal rules generally interact with informal constraints in a society?
What is a key characteristic of cultural changes, as they relate to institutional frameworks?
What is a key characteristic of cultural changes, as they relate to institutional frameworks?
Which of the following best describes the price individuals pay for acting on their beliefs within institutional settings?
Which of the following best describes the price individuals pay for acting on their beliefs within institutional settings?
Along the continuum from informal to formal constraints, where would written constitutions typically be placed?
Along the continuum from informal to formal constraints, where would written constitutions typically be placed?
According to the content, what is a crucial factor that significantly impacts transaction costs and the structuring of contracts?
According to the content, what is a crucial factor that significantly impacts transaction costs and the structuring of contracts?
What are the two primary reasons the content suggests that enforcement is typically imperfect?
What are the two primary reasons the content suggests that enforcement is typically imperfect?
How does the content suggest parties to an exchange ensure that the exchange is worthwhile?
How does the content suggest parties to an exchange ensure that the exchange is worthwhile?
According to the content, what is identified as a significant impediment to economic advancement, especially in underdeveloped countries?
According to the content, what is identified as a significant impediment to economic advancement, especially in underdeveloped countries?
What concept from previous chapters is extended to explore problems in the transfer of rights?
What concept from previous chapters is extended to explore problems in the transfer of rights?
What assumption does the content make about enforcement in discussions of transaction costs?
What assumption does the content make about enforcement in discussions of transaction costs?
What is the primary focus of the New Industrial Organization literature mentioned in the content?
What is the primary focus of the New Industrial Organization literature mentioned in the content?
How does the content contrast its approach to transaction costs with Oliver Williamson's approach?
How does the content contrast its approach to transaction costs with Oliver Williamson's approach?
According to William Riker, what is the central question regarding constitutional forms and liberty?
According to William Riker, what is the central question regarding constitutional forms and liberty?
What is the significance of 'the law that is written in the hearts of the people,' as contended by Rousseau and referenced by Riker?
What is the significance of 'the law that is written in the hearts of the people,' as contended by Rousseau and referenced by Riker?
What does the author suggest about the successful outcome of constitutional forms evolving in England in the seventeenth century?
What does the author suggest about the successful outcome of constitutional forms evolving in England in the seventeenth century?
What are 'self-enforcing standards of conduct,' and why are they considered important?
What are 'self-enforcing standards of conduct,' and why are they considered important?
What is the main concern of the author regarding the creation of self-enforcing constraints?
What is the main concern of the author regarding the creation of self-enforcing constraints?
How does Vincent Ostrom's theory of the compound republic relate to Madison's solution in The Federalist Papers?
How does Vincent Ostrom's theory of the compound republic relate to Madison's solution in The Federalist Papers?
What is the relationship between constitutional forms and public opinion?
What is the relationship between constitutional forms and public opinion?
What underlying assumption does Riker challenge in his critique of constitutional theory?
What underlying assumption does Riker challenge in his critique of constitutional theory?
Flashcards
Informal Constraints
Informal Constraints
Socially transmitted information that is part of our heritage.
Culture
Culture
Transfer of knowledge, values, and behaviors from one generation to the next through teaching and imitation.
Cultural Filter
Cultural Filter
A language-based conceptual framework for encoding and interpreting information.
Brain's Ability to Learn
Brain's Ability to Learn
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Expected Utility Model
Expected Utility Model
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Institutions
Institutions
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Cultural Filter Continuity
Cultural Filter Continuity
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Order in Stateless Societies
Order in Stateless Societies
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Dual Utility Model
Dual Utility Model
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Morality of Cooperation
Morality of Cooperation
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Culture and Information Processing
Culture and Information Processing
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Conventions & Culture
Conventions & Culture
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Social Norms
Social Norms
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Choice Set
Choice Set
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Game Theory & Norms
Game Theory & Norms
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Informal Constraints Role
Informal Constraints Role
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Kinship Ties & Economic Transition
Kinship Ties & Economic Transition
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Ellickson's Shasta County Study
Ellickson's Shasta County Study
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Relationship: Formal vs. Informal Rules
Relationship: Formal vs. Informal Rules
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Socially Sanctioned Norms
Socially Sanctioned Norms
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Internally Enforced Standards
Internally Enforced Standards
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Informal Congressional Constraints
Informal Congressional Constraints
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Hamilton's Duel Dilemma
Hamilton's Duel Dilemma
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New Industrial Organization
New Industrial Organization
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Cultural Processing of Information
Cultural Processing of Information
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Enforcement Imperfection
Enforcement Imperfection
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Persistence of Informal Constraints
Persistence of Informal Constraints
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Reasons for Imperfect Enforcement
Reasons for Imperfect Enforcement
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Tension Between Formal and Informal Rules
Tension Between Formal and Informal Rules
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Information Asymmetry
Information Asymmetry
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Formal Constraints Definition
Formal Constraints Definition
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Enforcement Cost
Enforcement Cost
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Evolution Towards Formalization
Evolution Towards Formalization
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Enforcement Importance
Enforcement Importance
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Increasing Returns to Formalization
Increasing Returns to Formalization
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Considering Enforcement
Considering Enforcement
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Complementary Nature of Rules
Complementary Nature of Rules
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Imperfect enforcement consequences
Imperfect enforcement consequences
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Impact of Tech on Standardization
Impact of Tech on Standardization
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Efficacy of Constitutional Forms
Efficacy of Constitutional Forms
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Compound Republic
Compound Republic
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Causality Dilemma (Constitutional)
Causality Dilemma (Constitutional)
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Honesty and Integrity (Judges)
Honesty and Integrity (Judges)
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Self-Enforcing Standards
Self-Enforcing Standards
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Mixture of Constraints
Mixture of Constraints
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Study Notes
- People in all societies create constraints for structuring relations, helping reduce human interaction costs given limited information and computational abilities
- Describing precise informal rules structuring interaction is harder than describing formal ones
- Informal constraints defy neat specification and unambiguous significance tests, but remain important
- The modern Western world views life through formal laws and property rights
- Formal rules make up a small but important part of all constraints shaping choices
- Daily interaction, whether within families, social relations, or business, are governed mostly by codes of conduct, norms, and conventions
- Formal rules underlie these informal constraints, but aren't always obvious sources of choice in daily interactions
- Informal constraints' importance is seen when constitutions imposed on different societies yield different outcomes
- Discontinuous institutional change (revolution/military conquest) produces new outcomes
- The persistence of society aspects despite total rule change is striking
- Japanese culture survived the U.S. occupation after WWII
- Post-revolutionary U.S. remained much as it had been in colonial times
- Jews, Kurds, and other groups persisted through centuries of formal status changes
- The Russian Revolution, despite its immense scale, cannot be understood without considering surviving informal constraints
- Informal constraints derive from socially transmitted information, a heritage known as culture
- The mind processes information based on its programming with structured natural languages that code for perceptual, attitudinal, moral, and factual knowledge
- Culture is the transmission of knowledge, values, and behavior-influencing factors from one generation to the next, via teaching and imitation
- Culture offers a language-based framework for encoding and interpreting sensory information
Human interaction without formal rules in stateless societies
- Anthropological literature offers extensive controversial findings
- It is important for historical work, order analysis in primitive societies, and implications for understanding informal restraints
- Evans-Pritchard observed that the Nuer tended to live in relative harmony despite the potential for theft and disorder
- The Nuer avoided harmful effects from self-interest pursuit, even without formal institutions like courts and police
Institutions in Primitive societies in tribes with no state or formal rules
- Bates describes deterring effects from compensation, and feud threats for preserving order
- This cooperative solution makes sense in game theoretic terms
- Avoiding a one-shot prisoner's dilemma, an iterated game is played, where feud threats incentivize parties to preserve order, discouraging interfamily cattle raiding
- Family members prevent raiding because a feud would harm all
- Extensive anthropological literature clarifies that exchange in tribal societies is not simple
- Dense social networks create stable informal structures when states and formal rules are absent
- Communities like the Tonga operate with rules defining appropriate action, limiting conflict by defining expectations
- Rules reduce ambiguity, allowing individuals to prioritize legitimately
Informal constraints
- Order arises from dense social networks, mutual understanding, and the threat of violence
- Deviant behavior is intolerable because it undermines tribal group stability and insurance
- Richard Posner's primitive society model explains many institutional features in such communities
- High information costs, ineffective government, limited resources, and little innovation lead to weak government, family-based rights and duties, gift-giving, strict liability for injuries, generosity/honor emphasis, and collective guilt
- Posner emphasizes kinship as central to insurance, protection, and law enforcement
- Bates' Kenya study focuses on shifting kinship patterns amid changing political/economic conditions as key to understanding evolving institutional constraints when societies change
Pervasiveness of Informal Constraints
- Informal constraints are features of modern economies
- Robert Ellickson studied how rural residents in Shasta County, California, resolve trespass damage from stray livestock
- He found that residents rarely use legal redress; instead, they rely on informal constraints
- Casual introspection suggests informal constraints are pervasive
- Informal constraints coordinate repeated human interaction: extensions/modifications of formal rules, socially sanctioned norms, and internally enforced standards
Evidence of informal constraints
- Shepsle and Weingast's study shows that congressional committee power, unexplained by formal rules, stems from unwritten constraints evolved through repeated interaction
- These constraints arose from formal rules to address exchange problems, becoming recognized institutional constraints without being formalized
- Committees thereby influence legislative choices beyond formal structures
Examples of Informal Constraints
- Robert Axelrod illustrated a socially sanctioned behavior norm
- Alexander Hamilton, before his duel with Aaron Burr, listed reasons to avoid it, including the risk of death
- Despite rational reasons, Hamilton felt rejecting would diminish public effectiveness, as dueling was the accepted way for gentlemen to settle disputes
- Social norms, not formal rules determined the choice
Limitations of existing models for describing internal codes of conduct
- Both previous examples can be modeled as wealth-maximizing models within neoclassical frameworks
- However, internally enforced codes of conduct derive meaning from informal constraints
- Altering choices occur when people sacrifice wealth/income for other values
- Essays show legislative voting cannot be explained by interest groups faithfully mirroring constituent interests but must consider subjective personal legislator preferences
- Evidence shows that lower prices for ideas, ideologies, and convictions make them more influential
Emergence and Persistence of Informal Constraints: conventions that solve coordination problems
- Conventions are rules never consciously designed but are in everyone's interest, like rules of the road
- Characteristically, both parties minimize measurement costliness with self-enforcing exchange
- Conventions solving coordination problems account for a large proportion of total economy-transacting costs
- Informal constraints arising in exchange contexts but not self-enforcing entail features reducing measurement/enforcement costs
- Without constraints, asymmetric information and related gains distribution prompt excessive measurement resources or render exchange impossible due to unenforceability
- Informal constraints can take the form of agreed-upon low-cost measurement (standardized weights/measures)
- Enforcement requires second/third-party effectiveness via sanctioning or information networks sharing third-party exchange performance information (credit ratings, Better Business Bureaus)
- These organizations/instruments making cooperative norms effective are a major part of complex exchange history and parallel game theoretic models which produce cooperative outcomes by changing discount rates/increasing information
- Complex exchange growth in later medieval/early modern Europe was facilitated by informal institutions like early law merchant publicized codes of merchant conduct
- Current prices and auditing/accounting lowered critical (measurable) information/enforcement expense
- The game-theoretic frame work raised cooperative options or raised cost of defection
Internally Enforced Codes of Conduct
- Maximizing informal constraints includes codes modifying behavior
- This is hard because one must model choices based on trade-offs between wealth and other values
- Religious beliefs or dedication to communism offer data on individual sacrifices for beliefs
- Experiments show individuals do not always free-ride, and the study provides both evidence and a behavior model
Motivation and Behavior
- Human behavior is more complex than the simple predicted utility model
- Chapter 3 noted honesty, integrity, and reputation have worth in wealth-maximizing terms
- Unexplained is the large residual
- No proven theory accounts for effective/ineffective ideologies, or choices made when payoffs to honesty, integrity, hard work, or voting are negative
Two partial explanations
- Howard Margolis's dual utility model and Robert Sugden's convention argument gain moral force
- Margolis claims individuals have two utility functions: S preferences (self-interest) and G preferences (social/group interest)
- Sugden believes conventions gain moral force if almost everyone follows them and each individual benefits when others follow the rule
- It evolves with the morality of cooperation
Conclusions
- Mental information processing underlies institutions and the way informal constraints shape the choice set
- Culture defines how individuals use information, affecting informal constraint specification
- Like norms, conventions are culture-specific
Persistence and Evolution
- Unexplained, for example, how norms become norms, and why they evolve or disappear
- Wealth-maximizing norms can be modeled in a game theoretic context
- Empirical study can reveal what informal constraints are most likely to produce cooperative behavior, or how incremental changes in such alter the game toward increasing/decreasing cooperative outcomes This leads to increases in our knowledge on developing complex exchanging forms
- The way in which contracts are written or the costs of transacting show indirect changes relating to constraints
- Transaction cost framework offers promise for exploring constraints
- The decline in Dutch (seventeenth century) and English capital markets (early eighteenth century) shows increasing security of property rights due to both formal and informal institutional constraints
- Enforcing contracts from merchant codes included ostracizing violators and eventually codifying practices in formal law
- Self-imposed codes of conduct are important in constraining behavior
- Despite lacking understanding of its source, its impact is measurable by examining marginal changes to express convictions
Additional Information
- Such analysis explains the power of subjective views in decisions
- If the demand function is negatively sloped, the lower the cost of expressing beliefs, the more important they are as determinants of choice
- Formal institutions such as courts, hierarchies that include slack in the agent - principal relationship in legislatures make it easier for people to have little cost of the preferences
Limitations of current research
- No one knows what determines the value of convictions
- The function is negatively sloped, and the price for acting on one's convictions is low
- Informal constraints, affected by culture, play a key role in how institutions evolve in the long run, causing path dependence
- Neat models for culture evolution are still absent, but cultural traits are tenaciously consistent, and cultural changes are incremental
- Informal constraints that stem from culture do not react at once to formal rule changes Tension between altered formal rules and persistent informal constraints affects how economies evolve
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Description
Explore how culture shapes individual behavior through various mechanisms. Understand the role of the cultural filter in maintaining informal constraints. Discover Evans-Pritchard's observations on the Nuer society and the connection between cultural transmission and brain function.