ABSTRACT
To conceive of institutions as rules of the social game links institutions closely with the way individuals think. Rules reflect cause-and-effect relationships. But causality is also a fundamental organizing principle of individual thinking. Individuals tend to recount their professional opinions with narratives that have a causal structure (Bower and Morrow 1990; Tversky and Kahneman 1982). When asked to describe the environmental challenges they were facing in the broadest sense, the interviewees in the case studies typically provided a rich account of the most important problems, potential solutions to the problems and, most importantly, the institutional constraints to the solutions. The causal mental model is thus an individual's interpretation of the institutional rules that constrain his or her decisions. This makes the study of institutions also a study of cognition.
