Figure 2.

An institution is a mechanism of communication whose output is the rules for economic interactions. As such, one is in the presence of a political game form, where the preferences of group members for institutional rules are expressed, followed by an economic game form. The political game form could give equal weight to the preferences of all group members, as in egalitarian institutions, or could give more weight to dominant individuals, as happened with the origin of agriculture. The result of the political game form is the rules (or game form) for the subsequent economic interactions. The economic interactions determine the fitness or material rewards to individuals and may, for example, be a variant of a public goods or coordination game, or an exchange economy where goods are traded.