Luca Zarri 2008-09-18

From OBTnotes

On Punishing Non-Punishers

When (Not So) Nice Guys Deserve the Stick, not the Carrot

• from University of Verona Econ
• Speaker's site

Abstract

In experiments, different player ‘types’ seem to emerge: (1) some subjects are standard selfish maximizers, confirming that the homooeconomicus exists; (2) other subjects act unselfishly, as if they were driven by other-regarding preferences; (3) a third group of players are willing to nonstrategically punish and/or reward others (i.e. they are driven by some form of ‘strong reciprocity’, often on the basis of an evaluation of the opponent’s intentions). Hence, it is natural to ask the following question: can cooperation endogenously emerge and be sustainable over time within a large-scale population composed of three ‘experimentally focal’ types such as egoists, altruists and strongly reciprocal players? This paper provides a theoretical account of the persistence of some forms of intention-based strong reciprocity even when evolutionary pressure selects against behaviors yielding lower material payoffs. It is shown that, paradoxically, punishing – rather than rewarding – altruists is successful in enforcing cooperation, whereas other forms of strong reciprocity (such as a simultaneous recourse to the ‘stick’ against egoists and the ‘carrot’ in favor of altruists) turn out to be extremely maladaptive, within the social environment under study.

Notes

• If one is interested in arriving at a cooperative equilibrium in a population that consists of altruists, selfish maximizers, and reciprocators, it is best to punish the altruists. This is because they feed the maximizers and allow them to dominate.

• Altruists are second-order free riders because they never incur the costs of maintaining the social norms through punishment and reward.