Rewards work better than punishment in enhancing cooperation

Rand and colleagues have examined cooperation among 192 participants in a public goods game probing the fundamental tension between the interests of an individual and a group. In more than 50 rounds of interaction, each of four participants in a group would decide how much to contribute toward a common pool that benefited all four equally. Each participant was then able — at a cost to himself or herself — to either reward or punish each of the three other subjects for their contributions to the group, or lack thereof. Here is their abstract:

The public goods game is the classic laboratory paradigm for studying collective action problems. Each participant chooses how much to contribute to a common pool that returns benefits to all participants equally. The ideal outcome occurs if everybody contributes the maximum amount, but the self-interested strategy is not to contribute anything. Most previous studies have found punishment to be more effective than reward for maintaining cooperation in public goods games. The typical design of these studies, however, represses future consequences for today’s actions. In an experimental setting, we compare public goods games followed by punishment, reward, or both in the setting of truly repeated games, in which player identities persist from round to round. We show that reward is as effective as punishment for maintaining public cooperation and leads to higher total earnings. Moreover, when both options are available, reward leads to increased contributions and payoff, whereas punishment has no effect on contributions and leads to lower payoff. We conclude that reward outperforms punishment in repeated public goods games and that human cooperation in such repeated settings is best supported by positive interactions with others.