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

Author

Listed:
  • 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.

Suggested Citation

  • Stoop, Jan & van Soest, Daan & Vyrastekova, Jana, 2011. "Carrots without Bite: On the Ineffectiveness of 'Rewards' in sustaining Cooperation in Social Dilemmas," MPRA Paper 30538, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:30538
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    File URL: https://mpra.ub.uni-muenchen.de/30538/1/MPRA_paper_30538.pdf
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    References listed on IDEAS

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    1. Samuel Bowles & Herbert Gintis, 2002. "Social Capital and Community Governance," Economic Journal, Royal Economic Society, vol. 112(483), pages 419-436, November.
    2. Jana Vyrastekova & Daan van Soest, 2008. "On the (in)effectiveness of rewards in sustaining cooperation," Experimental Economics, Springer;Economic Science Association, vol. 11(1), pages 53-65, March.
    3. Martin Sefton & Robert Shupp & James M. Walker, 2007. "The Effect Of Rewards And Sanctions In Provision Of Public Goods," Economic Inquiry, Western Economic Association International, vol. 45(4), pages 671-690, October.
    4. Fischbacher, Urs & Gachter, Simon & Fehr, Ernst, 2001. "Are people conditionally cooperative? Evidence from a public goods experiment," Economics Letters, Elsevier, vol. 71(3), pages 397-404, June.
    5. Nikos Nikiforakis, 2004. "Punishment and Counter-punishment in Public Goods Games: Can we still govern ourselves?," Experimental 0403001, University Library of Munich, Germany.
    6. Laurent Denant-Boemont & David Masclet & Charles Noussair, 2007. "Punishment, counterpunishment and sanction enforcement in a social dilemma experiment," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 33(1), pages 145-167, October.
    7. repec:cup:apsrev:v:86:y:1992:i:02:p:404-417_08 is not listed on IDEAS
    8. Maier-Rigaud, Frank P. & Martinsson, Peter & Staffiero, Gianandrea, 2010. "Ostracism and the provision of a public good: experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 73(3), pages 387-395, March.
    9. David Masclet & Charles Noussair & Steven Tucker & Marie-Claire Villeval, 2003. "Monetary and Nonmonetary Punishment in the Voluntary Contributions Mechanism," American Economic Review, American Economic Association, vol. 93(1), pages 366-380, March.
    10. 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.
    11. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    12. Simon Gachter & Ernst Fehr, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September.
    13. Ernst Fehr & Simon Gaechter, 2003. "Altruistic Punishment in Humans," Microeconomics 0305006, EconWPA.
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    Cited by:

    1. repec:kap:expeco:v:20:y:2017:i:2:d:10.1007_s10683-016-9485-0 is not listed on IDEAS
    2. Xiaofei Pan & Daniel Houser, 2017. "Social approval, competition and cooperation," Experimental Economics, Springer;Economic Science Association, vol. 20(2), pages 309-332, June.

    More about this item

    Keywords

    Social dilemmas; economic experiments; rewards.;

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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