institutional change

A game theory approach to institutional change, Archives of Economic History, XVII(2): 63-90 (JEL Listed) (2005, in common with N. Kyriazis)

The subject of lock-in or path dependence has raised considerable interest in its various aspects. Economists have distinguished three different areas of lock-in: institutional, technological and spatial. In this paper we adapt for the first time a model that combines the new institutionalism approach with the mathematics of game theory in the form of signaling games in order to formulate a specific theory of path dependence and regime change, followed by the historical evidence of one specific case of sudden shock and change of regimes that take the form of what we call ‘turn to the sea’.