Heterogeneity Promotes Cooperation in the Second-Order Free Rider Dilemma

• In Event: 259 - Section on Rationality and Society Paper Session. Rationality and Social Structure

Abstract

Peer-punishment is effective in promoting cooperation, but the costs associated with punishing defectors often exceed the benefits for the group. It has been argued that centralized sanctioning institutions evolved to overcome the detrimental effects of peer-punishment. However, this argument presupposes the existence of a legitimate authority and leaves an unresolved gap in the transition from decentralized peer-punishment to centrally organized enforcement. Here we show that the origins of centralized sanctioning could lie in individuals’ distinct ability to punish defectors. In our laboratory experiment, we vary the structure of the second-order public good game to disentangle the effects of punitive preferences, monetary incentives, and individual punishment costs on the punishment of defectors. We find that actors tacitly coordinate on the strongest group member to punish defectors, even if the strongest individual incurs a net loss from punishment. Such coordination leads to a more efficient production of the second-order public good and is more effective in promoting cooperation than a group of equals.

Authors

• Andreas Diekmann, Swiss Federal Institute of Technology ETH Zurich

• Wojtek Przepiorka, Utrecht University