Punishment Mechanisms and Their Effect on Cooperation: A Simulation Study

In social dilemmas punishment costs resources, not just from the one who is punished but often also from the punisher and society. Reciprocity on the other side is known to lead to cooperation without the costs of punishment. The questions at hand are whether punishment brings advantages besides its costs, and how its negative side-effects can be reduced to a minimum in an environment populated by agents adopting a form of reciprocity. Various punishment mechanisms have been studied in the economic literature such as unrestricted punishment, legitimate punishment, cooperative punishment, and the hired gun mechanism. In this study all these mechanisms are implemented in a simulation where agents can share resources and may decide to punish other agents when the other agents do not share. Through evolutionary learning agents adapt their sharing/punishing policy. When the availability of resources was restricted, punishment mechanisms in general performed better than no-punishment, although unrestricted punishment was performing worse. When resource availability was high, performance was better in no-punishment conditions with indirect reciprocity. Unrestricted punishment was always the worst performing mechanism. Summarized, this paper shows that, in certain environments, some punishment mechanisms can improve the efficiency of cooperation even if the cooperating system is already based on indirect reciprocity.