The mechanism by which institutions act is through constraining the behavior of individuals. This can be in a discrete way such as disallowing a behavior, or it can be in a continuous way, by making certain behaviors more expensive or harder to reach in other ways. While the former are more obvious to us, the latter are perhaps the more important mechanisms for keeping our society going.
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Information as constraint of behavior
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The mechanism by which institutions act is through constraining the behavior of individuals. This can be in a discrete way such as disallowing a behavior, or it can be in a continuous way, by making certain behaviors more expensive or harder to reach in other ways. While the former are more obvious to us, the latter are perhaps the more important mechanisms for keeping our society going.