Abstract
Economic theory offers two different approaches to the analysis of group formation and the role of institutions. General equilibrium approach explores the influence of the economic environment on formation of coalitions. Game theory explores the influence of institutional rules on equilibrium outcomes. We introduce an integrative approach—an institution's policy depends on its membership, while its membership depends on the policies of all the institutions. We present three distinct mathematical approaches to these models, highlighting the algebraic nature of the question of existence of equilibrium. Our apparatus cover many economic and political environments, including cases with multiple dimensions and multiple institutions.Journal of Economic LiteratureClassification Numbers: C62, D50, D71, D72, H11, H40, R13, R53.
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