From the manuscript for Institutional Genes

The incentive compatibility observed by institutional genes encompasses both the perfectly rational incentive compatibility of game theory and mechanism design theory, and a broader form of incentive compatibility involving bounded rationality. The latter is generally seen in social consensus and other rules and norms that people adhere to, and which have evolved over time. Individuals who breach these rules tend to isolate or even bring punishment upon themselves, having violated the incentive-compatible conditions of the society in which they live. According to Hayek, human reasoning is extremely limited. To alleviate the onerous burden of information gathering and rational reasoning, most people base their social behaviour, most of the time, on rules that have evolved over time and are compatible with their incentives, rather than relying on their own reasoning abilities. Hayek thus described man as a creature that follows rules. Recent advances in contract theory, and in law and economics, have further confirmed Hayek's thesis both theoretically and empirically. Hart et al (Hart & Moore 2008, Frydlinger & Hart 2022) demonstrate that in practice it tends not to be possible for contracts to be designed in a perfectly rational way, and that contracts are therefore always incomplete, and that when devising a contract people intentionally use social rules or norms which have to be adhered to, as contractual provisions. Bolton and Brooks (2022) demonstrate that court enforcement of contracts is often based on adherence to social conventions, owing to the insurmountable practical difficulties of relying on a perfectly rational approach to the law.