Promoting cooperation in nonlinear social dilemmas through peer punishment

Abstract

Many social dilemmas exhibit nonlinearities and equilibrium outcomes in the interior of the choice space. This paper reports a laboratory experiment studying whether peer punishment promotes socially efficient behavior in such environments, which have been ignored in most experimental studies of peer punishment. It compares the effectiveness of peer punishment in a linear public good game to the effectiveness of this decentralized enforcement mechanism in two nonlinear social dilemma games: a piecewise linear public good game and a common pool resource game. While peer punishment improves cooperation in these new environments, the impact of punishment is weaker and takes longer to be effective. This appears to be due to the greater complexity of the nonlinear settings, which makes socially optimal choices more difficult to identify.

Linking Wealth and Punishment Effectiveness: Punishment and Cooperation Under Congruent Heterogeneities

“…In this respect, using a common pool resource game, Ostrom, Walker, and Gardner () observe that peer punishment alone (i.e., without communication among group members) does not enhance cooperation. Moreover, Cason and Gangadharan () find that the impact of punishment is weaker and takes longer to effect in a nonlinear public good game and a common pool resource game than in a linear public good game. In these games the Nash equilibria and the socially efficient outcomes are less obvious than in a linear public good game, making it harder to identify free riding and cooperation (see Cason and Gangadharan , 69–72).…”

Common-pool resources are intrinsically unstable

“…Although they do not provide individual data in their papers, their studies seemingly share the pulsing behavior. On the other hand, Cason and Gangadharan (2014) used an experimental design with n=4, where our theory predicts that the Nash equilibrium is unstable. However, the standard errors of the individual data are quite low, and they report that peer punishment works well.…”

“…First, it was the first to use a nonlinear payoff function for a CPR experiment. Since the procedure for experiments with nonlinear payoff functions is complicated, many experimental social scientists still use linear payoff functions (Noussair et al 2011;Osés-Eraso and Viladrich-Grau 2011;Botelho et al 2014;Becchetti et al 2015), although some do use nonlinear functions 600 Tatsuyoshi Saijo et al (Rodriguez-Sickert et al 2008;Vyrastekova and Van Soest 2008;Hayo and Vollan 2012;Cason and Gangadharan 2014). Second, the number of appropriators is eight in their experiments, which is unusually high for CPR experiments.…”

“…Second, the number of appropriators is eight in their experiments, which is unusually high for CPR experiments. For example, among the eight papers we surveyed (Rodriguez-Sickert et al 2008;Vyrastekova and Van Soest 2008;Noussair et al 2011;Osés-Eraso and ViladrichGrau 2011;Hayo and Vollan 2012;Botelho et al 2014;Cason and Gangadharan 2014;Becchetti et al 2015), the number of appropriators was four in four papers, five in three papers, and six in one paper. These two properties (i.e.…”

Taxation, redistribution, and observability in social dilemmas

“…Spraggon (, ) and Cason and Gangadharan (, ) reported results using a nonlinear revenue function, whereas other studies introduced nonlinearity in the cost function (Ostrom, Walker, & Gardner, ). Cason and Gangadharan () showed that nonlinearities could play an important role in the effectiveness of instruments for improving cooperation in social dilemmas, as in more complex nonlinear settings, the optimal choices become more difficult to identify. In this study, we choose the more realistic environment of a nonlinear payoff function, with a quadratic private revenue function.…”