Punishment and Gossip: Sustaining Cooperation in a Public Goods Game

In an environment in which free-riders are better off than cooperators, social control is required to foster and maintain cooperation. There are two main paths through which social control can be applied: punishment and reputation. Our experiments explore the efficacy of punishment and reputation on cooperation rates, both in isolation and in combination. Using a Public Goods Game, we are interested in assessing how cooperation rates change when agents can play one of two different reactive strategies, i.e., they can pay a cost in order to reduce the payoff of free-riders, or they can know others’ reputation and then either play defect with free-riders, or refuse to interact with them. Cooperation is maintained at a high level through punishment, but also reputation-based partner selection proves effective in maintaining cooperation. However, when agents are informed about free-riders’ reputation and play Defect, cooperation decreases. Finally, a combination of punishment and reputation-based partner selection leads to higher cooperation rates.