The case for institutions Agents and Institutions Real-world examples Case Studies Requirements Engineering System evolution: closed → semi-open → open (Good) governance: evaluating risks and monitoring compliance How can component actions be regulated without compromising their integrity or revealing information? Contracts: service level agreements Monitoring/Auditing framework Roles, powers, permissions, authentication Virtual ↔ physical world interaction: counts-as Institutions are a non-invasive way to constrain software components in open architectures De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 7 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Requirements Engineering System evolution: closed → semi-open → open (Good) governance: evaluating risks and monitoring compliance How can component actions be regulated without compromising their integrity or revealing information? Contracts: service level agreements Monitoring/Auditing framework Roles, powers, permissions, authentication Virtual ↔ physical world interaction: counts-as Institutions are a non-invasive way to constrain software components in open architectures De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 7 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Common Goods Common goods: “The Tragedy of the Commons” [Hardin, 1968] — an important class of goods that conventional markets cannot (?) handle A resource is shared None has an incentive to restrict their consumption Yet over-consumption will exhaust the resource Examples: water, pasture, fish, bandwidth A generic problem without a generic solution. For a detailed set of case studies see “Governing the Commons” by Elinor Ostrom [Ostrom, 1990] De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 8 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Common Goods Common goods: “The Tragedy of the Commons” [Hardin, 1968] — an important class of goods that conventional markets cannot (?) handle A resource is shared None has an incentive to restrict their consumption Yet over-consumption will exhaust the resource Examples: water, pasture, fish, bandwidth A generic problem without a generic solution. For a detailed set of case studies see “Governing the Commons” by Elinor Ostrom [Ostrom, 1990] De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 8 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions: Quality without a Name Christopher Alexander [Alexander, 1980]: architecture — the design of habitable spaces Effective social institutions — social interaction spaces are no different from habitable spaces In “Social Laws” [Shoham and Tennenholtz, 1995] the authors identify a more limited objective: Laws which guarantee the successful co-existence of multiple programs and programmers” Task-oriented domains [Rosenschein and Zlotkin, 1994]: achievement vs. maintenance tasks ≡ “good” final states arising from norm-compliant agent actions De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 9 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions: Quality without a Name Christopher Alexander [Alexander, 1980]: architecture — the design of habitable spaces Effective social institutions — social interaction spaces are no different from habitable spaces In “Social Laws” [Shoham and Tennenholtz, 1995] the authors identify a more limited objective: Laws which guarantee the successful co-existence of multiple programs and programmers” Task-oriented domains [Rosenschein and Zlotkin, 1994]: achievement vs. maintenance tasks ≡ “good” final states arising from norm-compliant agent actions De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 9 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions: Quality without a Name Christopher Alexander [Alexander, 1980]: architecture — the design of habitable spaces Effective social institutions — social interaction spaces are no different from habitable spaces In “Social Laws” [Shoham and Tennenholtz, 1995] the authors identify a more limited objective: Laws which guarantee the successful co-existence of multiple programs and programmers” Task-oriented domains [Rosenschein and Zlotkin, 1994]: achievement vs. maintenance tasks ≡ “good” final states arising from norm-compliant agent actions De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 9 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions: Quality without a Name Christopher Alexander [Alexander, 1980]: architecture — the design of habitable spaces Effective social institutions — social interaction spaces are no different from habitable spaces In “Social Laws” [Shoham and Tennenholtz, 1995] the authors identify a more limited objective: Laws which guarantee the successful co-existence of multiple programs and programmers” Task-oriented domains [Rosenschein and Zlotkin, 1994]: achievement vs. maintenance tasks ≡ “good” final states arising from norm-compliant agent actions De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 9 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions: Quality without a Name Christopher Alexander [Alexander, 1980]: architecture — the design of habitable spaces Effective social institutions — social interaction spaces are no different from habitable spaces In “Social Laws” [Shoham and Tennenholtz, 1995] the authors identify a more limited objective: Laws which guarantee the successful co-existence of multiple programs and programmers” Task-oriented domains [Rosenschein and Zlotkin, 1994]: achievement vs. maintenance tasks ≡ “good” final states arising from norm-compliant agent actions De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 9 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Content The case for institutions 1 Agents and Institutions 2 Real-world examples 3 Case Studies 4 De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 10 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies What is an Agent? An agent is a computer system capable of autonomous action in some environment: the situated agent. AGENT sense act ENVIRONMENT De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 11 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies What are Multi -Agent Systems? An agent can be more useful in the context of others: Can concentrate on tasks within competence Can delegate other tasks Can use ability to communicate, coordinate, negotiate AGENT 2 AGENT 1 AGENT 3 sense act act sense sense act ENVIRONMENT De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 12 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies What are Multi -Agent Systems? So, a MAS is a collection of interacting agents? No: Needs meaningful ways for agents to interact Needs organizational framework Needs identification of roles, responsibilities, permissions Needs to be verified Needs to be validated De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 13 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies What are Multi -Agent Systems? So, a MAS is a collection of interacting agents? No: Needs meaningful ways for agents to interact Needs organizational framework Needs identification of roles, responsibilities, permissions Needs to be verified Needs to be validated De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 13 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies What are Multi -Agent Systems? So, a MAS is a collection of interacting agents? No: Needs meaningful ways for agents to interact Needs organizational framework Needs identification of roles, responsibilities, permissions Needs to be verified Needs to be validated De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 13 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies What are Multi -Agent Systems? So, a MAS is a collection of interacting agents? No: Needs meaningful ways for agents to interact Needs organizational framework Needs identification of roles, responsibilities, permissions Needs to be verified Needs to be validated De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 13 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies What are Multi -Agent Systems? So, a MAS is a collection of interacting agents? No: Needs meaningful ways for agents to interact Needs organizational framework Needs identification of roles, responsibilities, permissions Needs to be verified Needs to be validated De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 13 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Agents and Organizations Agents ⇐ ⇒ Autonomy Agents are motivated by their own objectives, beliefs... ⇒ may take up organizational role if it serves their purposes Organization ⇐ ⇒ Regulation Organizations (too) have their own purpose Exist independently of the agents populating it Fundamental tension De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 14 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Agents and Organizations Agents ⇐ ⇒ Autonomy Agents are motivated by their own objectives, beliefs... ⇒ may take up organizational role if it serves their purposes Organization ⇐ ⇒ Regulation Organizations (too) have their own purpose Exist independently of the agents populating it Fundamental tension De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 14 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Agents and Organizations Agents ⇐ ⇒ Autonomy Agents are motivated by their own objectives, beliefs... ⇒ may take up organizational role if it serves their purposes Organization ⇐ ⇒ Regulation Organizations (too) have their own purpose Exist independently of the agents populating it Fundamental tension De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 14 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Need for organization Do agents need organizations? Do agents need to know/reason about the organization? Do MAS need organizations? Interaction in MAS cannot be based on communication alone MAS engineering requires high level agent-independent abstractions Explicit social concepts, defining the society in which agents participate De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 15 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Need for organization Do agents need organizations? Do agents need to know/reason about the organization? Do MAS need organizations? Interaction in MAS cannot be based on communication alone MAS engineering requires high level agent-independent abstractions Explicit social concepts, defining the society in which agents participate De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 15 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Need for organization Do agents need organizations? Do agents need to know/reason about the organization? Do MAS need organizations? Interaction in MAS cannot be based on communication alone MAS engineering requires high level agent-independent abstractions Explicit social concepts, defining the society in which agents participate De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 15 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies The agent perspective Ensure a better integration of agents with system, In order better to adapt to change Delegation of task/beliefs between agents � coalitions (organizational) structures that need representation to enable their exploitation Despite or thanks to: Multiple limitations: cognitive, physical, temporal, institutional Autonomy of agents The different organizations in which agents participate De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 16 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies The agent perspective Ensure a better integration of agents with system, In order better to adapt to change Delegation of task/beliefs between agents � coalitions (organizational) structures that need representation to enable their exploitation Despite or thanks to: Multiple limitations: cognitive, physical, temporal, institutional Autonomy of agents The different organizations in which agents participate De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 16 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies The agent perspective Ensure a better integration of agents with system, In order better to adapt to change Delegation of task/beliefs between agents � coalitions (organizational) structures that need representation to enable their exploitation Despite or thanks to: Multiple limitations: cognitive, physical, temporal, institutional Autonomy of agents The different organizations in which agents participate De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 16 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies The agent perspective Ensure a better integration of agents with system, In order better to adapt to change Delegation of task/beliefs between agents � coalitions (organizational) structures that need representation to enable their exploitation Despite or thanks to: Multiple limitations: cognitive, physical, temporal, institutional Autonomy of agents The different organizations in which agents participate De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 16 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies The MAS perspective Need to ensure a global behaviour at the MAS level: In terms of cooperation, collaboration, ... To be sure the global system goals, or those of an instance of a collective are achieved Need to represent observed patterns of interaction Despite or thanks to: Multiple limitations: cognitive, physical, temporal, institutional Autonomy of agents Descriptive of prescriptive view De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 17 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies The MAS perspective Need to ensure a global behaviour at the MAS level: In terms of cooperation, collaboration, ... To be sure the global system goals, or those of an instance of a collective are achieved Need to represent observed patterns of interaction Despite or thanks to: Multiple limitations: cognitive, physical, temporal, institutional Autonomy of agents Descriptive of prescriptive view De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 17 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies The MAS perspective Need to ensure a global behaviour at the MAS level: In terms of cooperation, collaboration, ... To be sure the global system goals, or those of an instance of a collective are achieved Need to represent observed patterns of interaction Despite or thanks to: Multiple limitations: cognitive, physical, temporal, institutional Autonomy of agents Descriptive of prescriptive view De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 17 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies What is an Institution? A set of rules: capable of describing correct and incorrect action, obligations acquired through correct action and sanctions levied for incorrect action while maintaining a record through its internal state. An institution is a set of rules that interprets some but not necessarily all of an agent’s actions as correct or incorrect within that context: the norm-regulated agent. AGENT sense act sense INSTITUTION act sense act ENVIRONMENT De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 18 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies What is an Institution? A set of rules: capable of describing correct and incorrect action, obligations acquired through correct action and sanctions levied for incorrect action while maintaining a record through its internal state. An institution is a set of rules that interprets some but not necessarily all of an agent’s actions as correct or incorrect within that context: the norm-regulated agent. AGENT sense act sense INSTITUTION act sense act ENVIRONMENT De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 18 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions Institutions facilitate and enforce the normative character of organizations Describe exchange mechanisms Specify coordination structures Determine interaction and communication forms within the organization Connect organizational and individual perspectives Make explicit the social norms governing behaviour, external to the agents De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 19 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions Institutions facilitate and enforce the normative character of organizations Describe exchange mechanisms Specify coordination structures Determine interaction and communication forms within the organization Connect organizational and individual perspectives Make explicit the social norms governing behaviour, external to the agents De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 19 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions Institutions facilitate and enforce the normative character of organizations Describe exchange mechanisms Specify coordination structures Determine interaction and communication forms within the organization Connect organizational and individual perspectives Make explicit the social norms governing behaviour, external to the agents De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 19 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions Institutions facilitate and enforce the normative character of organizations Describe exchange mechanisms Specify coordination structures Determine interaction and communication forms within the organization Connect organizational and individual perspectives Make explicit the social norms governing behaviour, external to the agents De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 19 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions Institutions facilitate and enforce the normative character of organizations Describe exchange mechanisms Specify coordination structures Determine interaction and communication forms within the organization Connect organizational and individual perspectives Make explicit the social norms governing behaviour, external to the agents De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 19 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions Institutions facilitate and enforce the normative character of organizations Describe exchange mechanisms Specify coordination structures Determine interaction and communication forms within the organization Connect organizational and individual perspectives Make explicit the social norms governing behaviour, external to the agents De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 19 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions and Norms Assertion: an institution is its norms What is a norm? Informal or formal constraint on action Definition: a principle of right action binding upon the members of a group and serving to guide, control, or regulate proper and acceptable behavior [Merriam-Webster dictionary] characterize NORMS establish borrowed by INSTITUTIONS ORGANIZATIONS instantiate clone synthesize De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 20 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions and Norms Assertion: an institution is its norms What is a norm? Informal or formal constraint on action Definition: a principle of right action binding upon the members of a group and serving to guide, control, or regulate proper and acceptable behavior [Merriam-Webster dictionary] characterize NORMS establish borrowed by INSTITUTIONS ORGANIZATIONS instantiate clone synthesize De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 20 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions and Norms Assertion: an institution is its norms What is a norm? Informal or formal constraint on action Definition: a principle of right action binding upon the members of a group and serving to guide, control, or regulate proper and acceptable behavior [Merriam-Webster dictionary] characterize NORMS establish borrowed by INSTITUTIONS ORGANIZATIONS instantiate clone synthesize De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 20 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions and Norms Assertion: an institution is its norms What is a norm? Informal or formal constraint on action Definition: a principle of right action binding upon the members of a group and serving to guide, control, or regulate proper and acceptable behavior [Merriam-Webster dictionary] characterize NORMS establish borrowed by INSTITUTIONS ORGANIZATIONS instantiate clone synthesize De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 20 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions and Norms Assertion: an institution is its norms What is a norm? Informal or formal constraint on action Definition: a principle of right action binding upon the members of a group and serving to guide, control, or regulate proper and acceptable behavior [Merriam-Webster dictionary] characterize NORMS establish borrowed by INSTITUTIONS ORGANIZATIONS instantiate clone synthesize De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 20 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies What is a Multi -institution? But there is not just one institution An agent acts in several institutions, concurrently, even simultaneously An institution has restricted competence; aggregation provides complex legal and/or social contexts Thus: a multi-institution is a combination of institutions providing the complete interpretation of an agent’s actions. act act AGENT sense sense sense act INSTITUTION 1 INSTITUTION 2 INSTITUTION 3 sense act sense act sense? act? INSTITUTION 4 INSTITUTION 5 sense act sense sense act ENVIRONMENT act De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 21 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies What is a Multi -institution? But there is not just one institution An agent acts in several institutions, concurrently, even simultaneously An institution has restricted competence; aggregation provides complex legal and/or social contexts Thus: a multi-institution is a combination of institutions providing the complete interpretation of an agent’s actions. act act AGENT sense sense sense act INSTITUTION 1 INSTITUTION 2 INSTITUTION 3 sense act sense act sense? act? INSTITUTION 4 INSTITUTION 5 sense act sense sense act ENVIRONMENT act De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 21 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies What is a Multi -institution? But there is not just one institution An agent acts in several institutions, concurrently, even simultaneously An institution has restricted competence; aggregation provides complex legal and/or social contexts Thus: a multi-institution is a combination of institutions providing the complete interpretation of an agent’s actions. act act AGENT sense sense sense act INSTITUTION 1 INSTITUTION 2 INSTITUTION 3 sense act sense act sense? act? INSTITUTION 4 INSTITUTION 5 sense act sense sense act ENVIRONMENT act De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 21 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies What is a Multi -institution? But there is not just one institution An agent acts in several institutions, concurrently, even simultaneously An institution has restricted competence; aggregation provides complex legal and/or social contexts Thus: a multi-institution is a combination of institutions providing the complete interpretation of an agent’s actions. act act AGENT sense sense sense act INSTITUTION 1 INSTITUTION 2 INSTITUTION 3 sense act sense act sense? act? INSTITUTION 4 INSTITUTION 5 sense act sense sense act ENVIRONMENT act De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 21 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Multiple Institutions A single institution can capture the full normative behaviour, but a monolithic structure may be undesirable: Single institutions with a limited range of interaction can be analysed and re-used more easily — institution libraries Institutions are situated in a social and legal framework with whose norms they must interoperate, so institutional workflows are unavoidable Institutional composition is a different process in which a single internally consistent institution is synthesized from several institutional specifications. A multi-institution is a workflow of several connected institutions, each with their own identity and probably with conflicting norms. De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 22 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Multiple Institutions A single institution can capture the full normative behaviour, but a monolithic structure may be undesirable: Single institutions with a limited range of interaction can be analysed and re-used more easily — institution libraries Institutions are situated in a social and legal framework with whose norms they must interoperate, so institutional workflows are unavoidable Institutional composition is a different process in which a single internally consistent institution is synthesized from several institutional specifications. A multi-institution is a workflow of several connected institutions, each with their own identity and probably with conflicting norms. De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 22 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Multiple Institutions A single institution can capture the full normative behaviour, but a monolithic structure may be undesirable: Single institutions with a limited range of interaction can be analysed and re-used more easily — institution libraries Institutions are situated in a social and legal framework with whose norms they must interoperate, so institutional workflows are unavoidable Institutional composition is a different process in which a single internally consistent institution is synthesized from several institutional specifications. A multi-institution is a workflow of several connected institutions, each with their own identity and probably with conflicting norms. De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 22 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Economic motivation Douglass C. North in “Institutional Change and Economic Performance” [North, 1991] defines: norms that guide and regulate behaviour scenes within which (software) agents may play rˆ oles, while interacting one with another De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 23 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Social motivation A similar point of view comes from the social sciences: Harr´ e and Secord in “The Explanation of Social Behaviour”, [Harr´ e and Secord, 1972] define: role-rule model for agent behaviour power being ascribed to agents under a set of conditions episodes in which agents interact and a dramaturgical model that collects + organizes episodes De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 24 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions Human institutions have a long history: origins in society or laws made by society. So common that we operate unaware of them Furthermore we play (or combine a set of) rˆ oles Institutions offer a basis for trust and security: decrease uncertainty reduce conflict of meaning create expectations of outcome simplify the decision process De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 25 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions Human institutions have a long history: origins in society or laws made by society. So common that we operate unaware of them Furthermore we play (or combine a set of) rˆ oles Institutions offer a basis for trust and security: decrease uncertainty reduce conflict of meaning create expectations of outcome simplify the decision process De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 25 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions Human institutions have a long history: origins in society or laws made by society. So common that we operate unaware of them Furthermore we play (or combine a set of) rˆ oles Institutions offer a basis for trust and security: decrease uncertainty reduce conflict of meaning create expectations of outcome simplify the decision process De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 25 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Exercise: The Family Groups: 2–3 people Objective: to specify some norms (at various levels) governing the institution of the family. What does the family help achieve? Establish objectives Establish values Establish context Identify rˆ oles, consider internal and external Define two kinds of norm Define an abstract norm Define a concrete norm: consider some or all of rˆ oles, situation, time, concrete terms and actions De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 26 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Exercise: The Family Objectives: education, value transmission, care, next generation Values: love, respect, socialization (family, friends, acquaintances, society at large) Context: society, country, religion Rˆ oles: parents, children, grand-parents, extended family, friends, etc. Abstract norm: help maintain the cohesion of the family Abstract norm: treat others as you want to be treated Concrete norm: older children should occasionally look after younger children Concrete norm: parents should take time for themselves De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 27 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Exercise: The Family Objectives: education, value transmission, care, next generation Values: love, respect, socialization (family, friends, acquaintances, society at large) Context: society, country, religion Rˆ oles: parents, children, grand-parents, extended family, friends, etc. Abstract norm: help maintain the cohesion of the family Abstract norm: treat others as you want to be treated Concrete norm: older children should occasionally look after younger children Concrete norm: parents should take time for themselves De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 27 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Exercise: The Family Objectives: education, value transmission, care, next generation Values: love, respect, socialization (family, friends, acquaintances, society at large) Context: society, country, religion Rˆ oles: parents, children, grand-parents, extended family, friends, etc. Abstract norm: help maintain the cohesion of the family Abstract norm: treat others as you want to be treated Concrete norm: older children should occasionally look after younger children Concrete norm: parents should take time for themselves De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 27 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Exercise: The Family Objectives: education, value transmission, care, next generation Values: love, respect, socialization (family, friends, acquaintances, society at large) Context: society, country, religion Rˆ oles: parents, children, grand-parents, extended family, friends, etc. Abstract norm: help maintain the cohesion of the family Abstract norm: treat others as you want to be treated Concrete norm: older children should occasionally look after younger children Concrete norm: parents should take time for themselves De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 27 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Exercise: The Family Objectives: education, value transmission, care, next generation Values: love, respect, socialization (family, friends, acquaintances, society at large) Context: society, country, religion Rˆ oles: parents, children, grand-parents, extended family, friends, etc. Abstract norm: help maintain the cohesion of the family Abstract norm: treat others as you want to be treated Concrete norm: older children should occasionally look after younger children Concrete norm: parents should take time for themselves De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 27 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Exercise: The Family Objectives: education, value transmission, care, next generation Values: love, respect, socialization (family, friends, acquaintances, society at large) Context: society, country, religion Rˆ oles: parents, children, grand-parents, extended family, friends, etc. Abstract norm: help maintain the cohesion of the family Abstract norm: treat others as you want to be treated Concrete norm: older children should occasionally look after younger children Concrete norm: parents should take time for themselves De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 27 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Exercise: The Family Objectives: education, value transmission, care, next generation Values: love, respect, socialization (family, friends, acquaintances, society at large) Context: society, country, religion Rˆ oles: parents, children, grand-parents, extended family, friends, etc. Abstract norm: help maintain the cohesion of the family Abstract norm: treat others as you want to be treated Concrete norm: older children should occasionally look after younger children Concrete norm: parents should take time for themselves De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 27 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Exercise: The Family Objectives: education, value transmission, care, next generation Values: love, respect, socialization (family, friends, acquaintances, society at large) Context: society, country, religion Rˆ oles: parents, children, grand-parents, extended family, friends, etc. Abstract norm: help maintain the cohesion of the family Abstract norm: treat others as you want to be treated Concrete norm: older children should occasionally look after younger children Concrete norm: parents should take time for themselves De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 27 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Content The case for institutions 1 Agents and Institutions 2 Real-world examples 3 Case Studies 4 De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 28 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions: examples Institutions are everywhere—formal and informal, legal and social—you just have to know for what to look... Conversation, negotiation, argument Lecture, seminar, problem class Shop: served vs. self-service Business: sole-trader, partnership, Ltd. company, plc, cooperative, charity, non-profit organization, ... Market: stock market, energy trading, brokering (stocks, flights), auction De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 29 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions: examples Institutions are everywhere—formal and informal, legal and social—you just have to know for what to look... Conversation, negotiation, argument Lecture, seminar, problem class Shop: served vs. self-service Business: sole-trader, partnership, Ltd. company, plc, cooperative, charity, non-profit organization, ... Market: stock market, energy trading, brokering (stocks, flights), auction De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 29 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions: examples Institutions are everywhere—formal and informal, legal and social—you just have to know for what to look... Conversation, negotiation, argument Lecture, seminar, problem class Shop: served vs. self-service Business: sole-trader, partnership, Ltd. company, plc, cooperative, charity, non-profit organization, ... Market: stock market, energy trading, brokering (stocks, flights), auction De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 29 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions: examples Institutions are everywhere—formal and informal, legal and social—you just have to know for what to look... Conversation, negotiation, argument Lecture, seminar, problem class Shop: served vs. self-service Business: sole-trader, partnership, Ltd. company, plc, cooperative, charity, non-profit organization, ... Market: stock market, energy trading, brokering (stocks, flights), auction De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 29 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Institutions: examples Institutions are everywhere—formal and informal, legal and social—you just have to know for what to look... Conversation, negotiation, argument Lecture, seminar, problem class Shop: served vs. self-service Business: sole-trader, partnership, Ltd. company, plc, cooperative, charity, non-profit organization, ... Market: stock market, energy trading, brokering (stocks, flights), auction De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 29 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Norms: examples The distribution of radio frequencies between bidders should take into account their established interests If estimated fish stock is x tonnes and viable mass is y tonnes ⇒ catch should be < ( x − y ) / # fishermen A front-office trader should not carry out settlements Polluter pays? Kyoto protocol, carbon credits Who should have this liver? Don’t led market players design your mechanism The purpose of these examples is to make the case that simple markets in isolation are inadequate in complex situations. De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 30 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Norms: examples The distribution of radio frequencies between bidders should take into account their established interests If estimated fish stock is x tonnes and viable mass is y tonnes ⇒ catch should be < ( x − y ) / # fishermen A front-office trader should not carry out settlements Polluter pays? Kyoto protocol, carbon credits Who should have this liver? Don’t led market players design your mechanism The purpose of these examples is to make the case that simple markets in isolation are inadequate in complex situations. De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 30 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Norms: examples The distribution of radio frequencies between bidders should take into account their established interests If estimated fish stock is x tonnes and viable mass is y tonnes ⇒ catch should be < ( x − y ) / # fishermen A front-office trader should not carry out settlements Polluter pays? Kyoto protocol, carbon credits Who should have this liver? Don’t led market players design your mechanism The purpose of these examples is to make the case that simple markets in isolation are inadequate in complex situations. De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 30 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Norms: examples The distribution of radio frequencies between bidders should take into account their established interests If estimated fish stock is x tonnes and viable mass is y tonnes ⇒ catch should be < ( x − y ) / # fishermen A front-office trader should not carry out settlements Polluter pays? Kyoto protocol, carbon credits Who should have this liver? Don’t led market players design your mechanism The purpose of these examples is to make the case that simple markets in isolation are inadequate in complex situations. De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 30 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Norms: examples The distribution of radio frequencies between bidders should take into account their established interests If estimated fish stock is x tonnes and viable mass is y tonnes ⇒ catch should be < ( x − y ) / # fishermen A front-office trader should not carry out settlements Polluter pays? Kyoto protocol, carbon credits Who should have this liver? Don’t led market players design your mechanism The purpose of these examples is to make the case that simple markets in isolation are inadequate in complex situations. De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 30 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Norms: examples The distribution of radio frequencies between bidders should take into account their established interests If estimated fish stock is x tonnes and viable mass is y tonnes ⇒ catch should be < ( x − y ) / # fishermen A front-office trader should not carry out settlements Polluter pays? Kyoto protocol, carbon credits Who should have this liver? Don’t led market players design your mechanism The purpose of these examples is to make the case that simple markets in isolation are inadequate in complex situations. De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 30 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Kinds of norms Abstract: expressing what ought (not) to be – states, but not how to achieve/avoid them Concrete: obligations or prohibitions on actions that apply in particular circumstances Regimenting: constraints on behaviour. Only norm-compliant actions are possible. Transgression is impossible. Regulating: requires explicit enforcement. Agent goals affect compliance decisions. Transgression may � sanction. De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 31 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Kinds of norms Abstract: expressing what ought (not) to be – states, but not how to achieve/avoid them Concrete: obligations or prohibitions on actions that apply in particular circumstances Regimenting: constraints on behaviour. Only norm-compliant actions are possible. Transgression is impossible. Regulating: requires explicit enforcement. Agent goals affect compliance decisions. Transgression may � sanction. De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 31 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Kinds of norms Abstract: expressing what ought (not) to be – states, but not how to achieve/avoid them Concrete: obligations or prohibitions on actions that apply in particular circumstances Regimenting: constraints on behaviour. Only norm-compliant actions are possible. Transgression is impossible. Regulating: requires explicit enforcement. Agent goals affect compliance decisions. Transgression may � sanction. De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 31 / 47
The case for institutions Agents and Institutions Real-world examples Case Studies Kinds of norms Abstract: expressing what ought (not) to be – states, but not how to achieve/avoid them Concrete: obligations or prohibitions on actions that apply in particular circumstances Regimenting: constraints on behaviour. Only norm-compliant actions are possible. Transgression is impossible. Regulating: requires explicit enforcement. Agent goals affect compliance decisions. Transgression may � sanction. De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 31 / 47
The case for institutions Agents and Institutions Case study 1: electricity markets in the UK Real-world examples Case study 2: complementary currencies Case Studies Content The case for institutions 1 Agents and Institutions 2 Real-world examples 3 Case Studies 4 Case study 1: electricity markets in the UK Case study 2: complementary currencies De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 32 / 47
The case for institutions Agents and Institutions Case study 1: electricity markets in the UK Real-world examples Case study 2: complementary currencies Case Studies Pre-privatisation Originally, electricity generation was controlled by a single (nationalised) organization, the Central Electricity Generating Board (CEGB) which owned and controlled the power stations and the means of distribution (the national grid). Domestic distribution controlled by local monopolies. Privatisation split the CEGB up into 4 power generating companies (PowerGen, Nuclear Electric,...) and one distribution company (National Grid Company). There were also several smaller generators. The NGC bought electricity and distributed to the domestic distribution companies. De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 33 / 47
The case for institutions Agents and Institutions Case study 1: electricity markets in the UK Real-world examples Case study 2: complementary currencies Case Studies The NGC and the “Pool” The pool operated on a 24hr basis, where each generator offered to supply x Megawatts for the period. NGC ranked the bids by price (from lowest to highest) and at 17:00 every day, it accepted as many of those bids as needed to meet predicted energy requirements. All accepted bids were paid at the price of the highest accepted bid. Consequently, the pool could be manipulated by the largest generators who could predict the bid cut-off and thus put forward over-priced bids that were ranked around the predicted national energy requirement. De Vos/Padget (Bath/CS) CM30174/Institutions November 22, 2011 34 / 47
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