MATHEMATICAL FORMALIZATION OF INSTITUTIONS

Abstract

The article proposes the way of mathematical formalization of institutions in the framework of game-theory approach. The rules are represented by transpositions of payoffs in payment matrix. Such the transitions call the change the structure of game equilibriums. This approach allows separation of coordination and distribution aspects of institutions, division institutions into classes and distinguishing aggregateс of institutions, which produce identical transformation. Through evolutionary game theory formalism it is shown that such parametric management influences the structure of steady states, what allows investigation of institutions’ influence on self-organization, in particular, through transformation of topology of phase portrait of the system. In accordance with the fact that dynamic with multiple steady states is typical for coordination problem as a whole, an approach suggested of the rules formalization appears to have rather broad application.

Keywords

• institutions
• rules
• game theory
• payoff transposition
• matrix
• parametric management