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The evolution of sanctioning institutions: an experimental approach to the social contract

Published online by Cambridge University Press:  14 March 2025

Boyu Zhang ,
Cong Li ,
Hannelore De Silva ,
Peter Bednarik  and
Karl Sigmund
Boyu Zhang
Affiliation:
School of Mathematical Sciences, Beijing Normal University, 100875 Beijing, China Faculty of Mathematics, University of Vienna, 1090 Vienna, Austria
Cong Li
Affiliation:
Key Laboratory of Animal Ecology and Conservation Biology, Centre for Computational Biology and Evolution, Institute of Zoology, Chinese Academy of Sciences, 100101 Beijing, P.R. China
Hannelore De Silva
Affiliation:
Department of Finance, Accounting and Statistics, Vienna University for Economics and Business, 1190 Wien, Austria
Peter Bednarik
Affiliation:
Courant Research Center Evolution of Social Behavior, University of Göttingen, 37073 Göttingen, Germany
Karl Sigmund*
Affiliation:
Faculty of Mathematics, University of Vienna, 1090 Vienna, Austria International Institute for Applied Systems Analysis (IIASA), 2361 Laxenburg, Austria
*
karl.sigmund@univie.ac.at
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Abstract

A vast amount of empirical and theoretical research on public good games indicates that the threat of punishment can curb free-riding in human groups engaged in joint enterprises. Since punishment is often costly, however, this raises an issue of second-order free-riding: indeed, the sanctioning system itself is a common good which can be exploited. Most investigations, so far, considered peer punishment: players could impose fines on those who exploited them, at a cost to themselves. Only a minority considered so-called pool punishment. In this scenario, players contribute to a punishment pool before engaging in the joint enterprise, and without knowing who the free-riders will be. Theoretical investigations (Sigmund et al., Nature 466:861–863, 2010) have shown that peer punishment is more efficient, but pool punishment more stable. Social learning, i.e., the preferential imitation of successful strategies, should lead to pool punishment if sanctions are also imposed on second-order free-riders, but to peer punishment if they are not. Here we describe an economic experiment (the Mutual Aid game) which tests this prediction. We find that pool punishment only emerges if second-order free riders are punished, but that peer punishment is more stable than expected. Basically, our experiment shows that social learning can lead to a spontaneously emerging social contract, based on a sanctioning institution to overcome the free rider problem.

Keywords

Public goodsExperimentsCollective actionPunishmentInstitutionSocial learning

JEL classification

C91: Laboratory, Individual Behavior C73: Stochastic and Dynamic Games • Evolutionary Games • Repeated Games
Type
Original Paper
Information
Experimental Economics , Volume 17 , Issue 2 , June 2014 , pp. 285 - 303
Copyright
Copyright © 2013 Economic Science Association

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Footnotes

Electronic Supplementary Material The online version of this article (doi:https://doi.org/10.1007/s10683-013-9367-7) contains supplementary material, which is available to authorized users.

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