ABSTRACT
The effects of institutions on economic outcomes are important when considering common-pool resources. Institutions of all varieties have become ubiquitous in the evolution of human society in relation to most if not all natural resources. Crawford and Ostrom (1995) view institutions as “enduring regularities of human action in situations structured by rules, norms, and shared strategies.” A majority vote, the institutional “rule” examined in this chapter, would seem to pre-date recorded history. Ostrom (1986) defines a “rule” as a “prescription commonly known and used by a set of participants to order repetitive, interdependent relationships.” As we will see, even an institution as basic as a majority voting rule has the potential to coordinate the otherwise rationally self-interested and myopic behavior of individual players toward a more socially beneficial outcome.
