Agent-Based Institutional Modelling: Novel Techniques for Deriving Structure

Institutions, as manifestations of social behaviour, are crucial elements of any society’s structure and are widely studied in the area of New Institutional Eco-nomics as a determinant of a society’s development and prosperity. Although taking promising steps by considering a wider array of behavioural influence mechanisms, to date analytical approaches primarily examine institutions from the perspective of stable equilibria, which are assumed as indicative for the ex-istence of institutions. In this work we shift the focus from equilibria to an inter-actionist perspective, and apply Agent-Based Modelling (ABM) for the purpose of institutional analysis. ABM offers the ability to represent institutions in great detail by using modelling metaphors that are in close alignment with real observable social structures and interaction patterns, as opposed to concentrating on rational strategy choices of structurally uniform individuals. With ABM we can leverage a sociological perspective and “grow ” institutional structures from the bottom up, instead o