Actions, routines, and the common pool of opportunities: Defining the institutional environment

Abstract

The aim of this paper is to define the concept of the institutional environment. First, it makes use of the concepts of affordance and physical-behavioural units to define a broader realm, referred to as the action environment. Second, the paper distinguishes two subdomains within the action environment: the domain of realization, which is composed of routinized physical-behavioural units as well as larger action scenarios, and the domain of opportunity, which consists of possible, yet untried, scenarios and is thus free from any routine. Third, the paper discusses a key economic difference between the two: realizations are assigned exclusive property rights, while opportunities constitute a commons. This establishes specific conditions for the institutionalization of an action environment and, consequently, for an institutional environment. The paper will provide an account of how such institutionalization works and its objectives.