Zero-determinant (ZD) strategies, as discovered by Press and Dyson, can enforce a linear relationship between a pair of players' scores in the iterated prisoner's dilemma. Particularly, the extortionate ZD strategies can enforce and exploit cooperation, providing a player with a score advantage, and consequently higher scores than those from either mutual cooperation or generous ZD strategies. In laboratory experiments in which human subjects were paired with computer co-players, we demonstrate that both the generous and the extortionate ZD strategies indeed enforce a unilateral control of the reward. When the experimental setting is sufficiently long and the computerized nature of the opponent is known to human subjects, the extortionate strategy outperforms the generous strategy. Human subjects' cooperation rates when playing against extortionate and generous ZD strategies are similar after learning has occurred. More than half of extortionate strategists finally obtain an average score higher than that from mutual cooperation.

SignificanceAn important research area in the social and biological sciences is how endogenous sanctions can promote cooperation in social dilemma situations, particularly in a budget-balanced (no need for external financing) manner. Punishment has had some success in experimental studies, but has serious shortcomings: It is socially wasteful materially and also tends to induce poor social relations. Reward avoids those issues and reinforces the social fabric. Our mechanism achieves high contributions in a public goods game (PGG) with peer reward in a budget-balanced tax-funding environment; notably, our environment also reverses the downward trend of the standard PGG. This research advances the field in a direction that will be important for practical policy applications, opening the door for further interesting and socially beneficial research.

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