Cooperation and Punishment in a Commons

Social scientists trying to deduce the theoretical principles of commons are starting to get some mainstream attention. The latest comes from an article in Science magazine (April 7, 2006), “Cooperation, Punishment and the Evolution of Human Institutions,” by Joseph Henrich, which merited an 18-inch news story in The New York Times on the same day. The Science article reports on a German experiment in game theory that essentially concludes that a functioning commons not only needs cooperation among its members. It needs the ability to punish free riders.

This conclusion is not exactly earth-shattering, of course, but it is significant that a team of German economists demonstrated this fact in a controlled, empirical experiment. They conclude that groups that have the means to sanction freeloaders are more likely to be profitable than those that do not. Like so many game theory models, this one uses a money game that ostensibly emulates the “rational choices” of the marketplace. (I’m waiting for a game theory experiment that might actually test the potency of squishy-headed collective commitments or idealism, rather than money-minded “rational choices.” The former are presumably too difficult to measure scientifically. But don’t get me wrong: this study represents progress.)

One of the study’s authors, Bettina Rockenbach, said: “The bottom line of the paper is that when you have people with shared standards, and some who have the moral courage to sanction others informally, then this kind of society manages very successfully.” Times reporter Benedict Carey wrote that the study “suggests that groups with few rules attract many exploitative people who quickly undermine cooperation. By contrast, communities that allow punishment, and in which power is distributed equally, are more likely to draw people who, even at their own cost, are willing to stand up to miscreants.” Sounds like a nice endorsement of democratic accountability!

As paraphrased by the Times, Rockenbach said that “being exploited appeared to cause deep frustration and anger in most students” [i.e., test participants]. It’s gratifying to learn that a commons marked by equality, cooperation and punishment can help relieve “deep frustration and anger.” It’s also nice to see an economist acknowledge that non-rational motivations might actually play a big role in how markets and commons function.