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Carrots without Bite: On the Ineffectiveness of 'Rewards' in sustaining Cooperation in Social Dilemmas

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  • Stoop, Jan
  • van Soest, Daan
  • Vyrastekova, Jana

Abstract

Peer-to-peer sanctions increase cooperation in multi-person social dilemmas (Fehr & Gachter (2000)), but not when subjects have the option to retaliate (Nikiforakis (2008)). One-shot peer-to-peer rewards have been found to enhance efficiency too (Vyrastekova & van Soest (2008), Rand et al. (2009a)), but it is an open question whether the positive impact on cooperation is weakened or strengthened when we allow for counterrewarding. We examine the impact of possible reciprocity in rewarding on cooperation in a non-linear public bad game, and find that efficiency in the social dilemma is equally low as absent any reward options. We hypothesize that subjects are unwilling to sever mutually profitable bilateral exchanges of reward tokens to induce cooperation in the social dilemma, and identify the underlying mechanism by comparing behavior across three matching protocols.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 30538.

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Date of creation: 11 Mar 2011
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Handle: RePEc:pra:mprapa:30538

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Keywords: Social dilemmas; economic experiments; rewards.;

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  1. Masclet, D. & Noussair, C. & Tucker, S. & Villeval, M.C., 2001. "Monetary and Non-monetary Punishment in the Voluntary Contributions Mechanism," Purdue University Economics Working Papers 1141, Purdue University, Department of Economics.
  2. Frank P. Maier-Rigaud & Peter Martinsson & Gianandrea Staffiero, 2005. "Ostracism and the Provision of a Public Good, Experimental Evidence," Working Paper Series of the Max Planck Institute for Research on Collective Goods, Max Planck Institute for Research on Collective Goods 2005_24, Max Planck Institute for Research on Collective Goods.
  3. Martin Sefton & Robert Shupp & James M. Walker, 2006. "The Effect of Rewards and Sanctions in Provision of Public Goods," Caepr Working Papers, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington 2006-005, Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington, revised Aug 2006.
  4. Nikos Nikiforakis, 2004. "Punishment and Counter-punishment in Public Goods Games: Can we still govern ourselves?," Royal Holloway, University of London: Discussion Papers in Economics, Department of Economics, Royal Holloway University of London 04/05, Department of Economics, Royal Holloway University of London, revised Apr 2004.
  5. Urs Fischbacher & Simon Gaechter & Ernst Fehr, . "Are People Conditionally Cooperative? Evidence from a Public Goods Experiment," IEW - Working Papers, Institute for Empirical Research in Economics - University of Zurich 016, Institute for Empirical Research in Economics - University of Zurich.
  6. Nikiforakis, Nikos & Engelmann, Dirk, 2011. "Altruistic punishment and the threat of feuds," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 78(3), pages 319-332, May.
  7. Ernst Fehr & Simon Gaechter, 1999. "Cooperation and Punishment in Public Goods Experiments," CESifo Working Paper Series 183, CESifo Group Munich.
  8. Samuel Bowles & Herbert Gintis, 2001. "Social Capital and Community Governance," Working Papers, Santa Fe Institute 01-01-003, Santa Fe Institute.
  9. Haigner, Stefan & Kocher, Martin & Sutter, Matthias, 2006. "Choosing the Stick or the Carrot? Endogenous Institutional Choice in Social Dilemma Situations," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5497, C.E.P.R. Discussion Papers.
  10. David Masclet & Laurent Denant-Boèmont & Charles Noussair, 2006. "Punishment, Counterpunishment and Sanction Enforcement in a Social Dilemma Experiment," Working Papers, HAL halshs-00009664, HAL.
  11. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, Springer, vol. 10(2), pages 171-178, June.
  12. Rand, David Gertler & Dreber, Anna & Fudenberg, Drew & Ellingson, Tore & Nowak, Martin A., 2009. "Positive Interactions Promote Public Cooperation," Scholarly Articles 3804483, Harvard University Department of Economics.
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