Complementary Institutions and Economic Development : A Demonstration Experiment

This paper considers the problem of why societies develop differently, a question most recently articulated by Acemoglu and Robinson (2012). We follow North (1990) in defining institutions as the "rules of the game in society." The question then becomes why do different societies develop different societal rules? To investigate this we examine a specific type of dynamic game (called an "Institutional Game"). Finally, we examine these ideas using what Charles Plott calls a "Demonstration Experiment", an experiment whose purpose is simply to demonstrate that the phenomena we are discussing could occur both in the laboratory and in the real world