Cooperation and punishment mechanisms in uncertain and dynamic networks

TL;DR

This study experimentally investigates how reputational uncertainty and social environment dynamics influence cooperation, revealing that uncertainty reduces cooperation and affects punishment behaviors differently depending on environmental change rates.

Contribution

It provides new insights into the effects of reputational uncertainty and social change rates on cooperation and punishment mechanisms in networks.

Findings

Reputational uncertainty decreases cooperation.

Fast-changing environments slightly increase cooperation.

Uncertainty leads to more leniency in punishment, especially in fast-changing settings.

Abstract

This paper examines experimentally how reputational uncertainty and the rate of change of the social environment determine cooperation. Reputational uncertainty significantly decreases cooperation, while a fast-changing social environment only causes a second-order qualitative increase in cooperation. At the individual level, reputational uncertainty induces more leniency and forgiveness in imposing network punishment through the link proposal and removal processes, inhibiting the formation of cooperative clusters. However, this effect is significant only in the fast-changing environment and not in the slow-changing environment. A substitution pattern between network punishment and action punishment (retaliatory defection) explains this discrepancy across the two social environments.