Abstract
Sustaining cooperation among unrelated individuals is a fundamental challenge in biology and the social sciences. In human society, this problem can be solved by establishing incentive institutions that reward cooperators and punish free-riders. Most of the previous studies have focused on which incentives promote cooperation best. However, a higher cooperation level does not always imply higher group fitness, and only incentives that lead to higher fitness can survive in social evolution. In this paper, we compare the efficiencies of three types of institutional incentives, namely, reward, punishment, and a mixture of reward and punishment, by analysing the group fitness at the stable equilibria of evolutionary dynamics. We find that the optimal institutional incentive is sensitive to decision errors. When there is no error, a mixture of reward and punishment can lead to high levels of cooperation and fitness. However, for intermediate and large errors, reward performs best, and one should avoid punishment. The failure of punishment is caused by two reasons. First, punishment cannot maintain a high cooperation level. Second, punishing defectors almost always reduces the group fitness. Our findings highlight the role of reward in human cooperation. In an uncertain world, the institutional reward is not only effective but also efficient.
Highlights
‘How did cooperative behaviour evolve’ is a fundamental question in biology and the social sciences [1]
Institutional incentives can overcome the problem of second-order free-riding and avoid antisocial punishment. This approach is more wasteful than peer incentives because subjects have to pay a fee to maintain the institution even if no one is being rewarded or punished
Theoretical studies based on evolutionary game theory have revealed that the effect of institutional incentives on cooperation can be understood in terms of the incentive size [44,46,47,49]
Summary
‘How did cooperative behaviour evolve’ is a fundamental question in biology and the social sciences [1]. Institutional incentives can overcome the problem of second-order free-riding and avoid antisocial punishment This approach is more wasteful than peer incentives because subjects have to pay a fee to maintain the institution even if no one is being rewarded or punished (which can be viewed as paying for the upkeep of a police force). We assume that individuals are boundedly rational, that is, they preferentially imitate the successful strategies and may make mistakes in decision-making [42,43,52,53] This learning process can be described by the replicator-mutator equation [54]. For intermediate or large decision errors, the use of punishment almost always reduces the group welfare, and reward becomes the most efficient incentive
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More From: Proceedings of the Royal Society B: Biological Sciences
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