Abstract
Polycentric organizations allow highly functional, or “group-beneficial,” outcomes to emerge from the myopic behavior of rule-guided individuals. How does polycentricity achieve this feat? Drawing on multilevel selection theory, I argue that polycentric orders support successful outcomes by defining group boundaries and reducing within-group fitness variance relative to between-group variance. The Price equation suggests that, by doing so, polycentric orders facilitate a process of collectively beneficial adaptation, including the capacity to evolve mechanisms for monitoring and punishing rule violators.
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