The dynamics of human behavior in the public goods game with institutional incentives.

Yali Dong,Boyu Zhang,Yi Tao

doi:10.1038/srep28809

Yali Dong, Boyu Zhang + Show 1 more

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https://doi.org/10.1038/srep28809

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Abstract

The empirical research on the public goods game (PGG) indicates that both institutional rewards and institutional punishment can curb free-riding and that the punishment effect is stronger than the reward effect. Self-regarding models that are based on Nash equilibrium (NE) strategies or evolutionary game dynamics correctly predict which incentives are best at promoting cooperation, but individuals do not play these rational strategies overall. The goal of our study is to investigate the dynamics of human decision making in the repeated PGG with institutional incentives. We consider that an individual’s contribution is affected by four factors, which are self-interest, the behavior of others, the reaction to rewards, and the reaction to punishment. We find that people on average do not react to rewards and punishment, and that self-interest and the behavior of others sufficiently explain the dynamics of human behavior. Further analysis suggests that institutional incentives promote cooperation by affecting the self-regarding preference and that the other-regarding preference seems to be independent of incentive schemes. Because individuals do not change their behavioral patterns even if they were not rewarded or punished, the mere potential to punish defectors and reward cooperators can lead to considerable increases in the level of cooperation.

Highlights

The empirical research on the public goods game (PGG) indicates that both institutional rewards and institutional punishment can curb free-riding and that the punishment effect is stronger than the reward effect
In the nine treatment experiments, each round of PGG is followed by a second stage, which corresponds, respectively to an institutional punishment (IP), an institutional reward (IR), or both institutional reward and punishment (IRP)
Recent empirical research has shown that conditional cooperation or conforming behaviors are common in PGG experiments[8,9,10,11,12,13,14,15], and people may have different attitudes concerning reward and punishment[15,19,20,21,22,32,45]

Summary

Introduction

The empirical research on the public goods game (PGG) indicates that both institutional rewards and institutional punishment can curb free-riding and that the punishment effect is stronger than the reward effect. Fischbacher and Gächter[17] indicated that human behaviors in PGG can be better described through a combination of the self-regarding preference and the other-regarding preference They showed that most people are imperfect conditional cooperators who match others’ contributions only partly. A self-regarding model that is based on NE analysis or evolutionary game dynamics correctly predicts which incentives are better at promoting cooperation[15,18,25,28,35,37,42], individuals do not play these rational strategies overall[15,21]. The above discussion suggests that it is important to recognize that actual people are not perfectly rational, and models that are based on self-interest may fail to predict the effectiveness of incentives at promoting cooperation It is unclear how people make decisions when confronted with institutional incentives and why subjects have different attitudes on reward and punishment. The other-regarding preference seems to be independent of the incentive schemes, and institutional incentives promote cooperation by affecting the self-regarding preference

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