ARTICLE TITLE: Structural uncertainty and institutions
AUTHORS: Shastitko A.
ABSTRACT: The article considers the options for integrating the concept of structural uncertainty into positive economic studies. It reveals various aspects of the understanding of structural uncertainty in the light of different types of situations of individual choice with the reference point of the neoclassical research program, the unit of analysis in which is an individual choice. Using the concept of the Laplacian observer, the difference between the situation of structural uncertainty and fundamental, or parametric, Knightian uncertainty is shown. The relationship between structural uncertainty and the problem of obtaining a solution in the game-theoretic framework with interaction between decision-makers is demonstrated. It is shown that the degree of freedom of choice can be negatively related to the probability of obtaining a solution acceptable to the participants of the game. One way to increase this probability is to create an institution that would work as a constraint in the process of decision-making. Based on various examples that are relevant for the discussion of the problem of adaptation in the condition of incomplete contracts, and in the situation of the erroneous choice of mechanisms of governance, of the significance of the structure of transaction costs in the commodity market, it is shown that the relationship between structural uncertainty, transaction costs and institutions serves the basis for normative conclusions given the context of different situations
KEYWORDS: institutions , transactions cost , equilibrium , structural uncertainty