Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2012:28: Surprising Institutions

Carl Hampus Lyttkens ()
Additional contact information
Carl Hampus Lyttkens: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden

Abstract: This paper introduces the notion of surprising institutions. Because we often carry incorrect beliefs about the world surrounding us and we are therefore often mistaken about the nature of the institutional structure facing us. The story told in this paper shows that an institution may come as a surprise, even though its origins lies some 500 years back, and that the information we receive as feedback on our actions does not necessarily improve our understanding of the institutional structure. It turns out that it is possible for an “ordinary citizen” to win a case against a multinational corporation, and against a government agency with more than 350 years on its neck (what a surprise!) but it also transpires that even if you win, you lose (not quite a surprise).

Keywords: institutions; beliefs; surprise; feedback; property rights

JEL-codes: H11; K11

14 pages, October 24, 2012

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WP12_28.pdf PDF-file 

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