The evolution of cooperation through institutional incentives and optional participation

TL;DR

This paper analyzes how institutional incentives and optional participation influence the evolution of cooperation, revealing that optional participation enhances cooperation under penalties but not rewards, with a comprehensive classification of dynamics.

Contribution

It provides a full classification of evolutionary dynamics in public good games considering optional participation and institutional incentives, extending prior models.

Findings

Penalties can lead to stable cooperation with optional participation.

Optional participation enhances cooperation under penalties but not rewards.

Coercion-based cooperation is globally stable when participation is optional.

Abstract

Rewards and penalties are common practical tools that can be used to promote cooperation in social institutions. The evolution of cooperation under reward and punishment incentives in joint enterprises has been formalized and investigated, mostly by using compulsory public good games. Recently, Sasaki et al. (2012, Proc Natl Acad Sci USA 109:1165-1169) considered optional participation as well as institutional incentives and described how the interplay between these mechanisms affects the evolution of cooperation in public good games. Here, we present a full classification of these evolutionary dynamics. Specifically, whenever penalties are large enough to cause the bi-stability of both cooperation and defection in cases in which participation in the public good game is compulsory, these penalties will ultimately result in cooperation if participation in the public good game is optional. The global stability of coercion-based cooperation in this optional case contrasts strikingly with the bi-stability that is observed in the compulsory case. We also argue that optional participation is not so effective at improving cooperation under rewards.