To build a Cooperative Society, is it better to punish or reward?

One of the basic components of a functional, cooperative society is a code of law, where the laws are usually enforced by some kind of incentive. Social incentives can either be positive (rewards) or negative (punishments), and a society must decide which combination to use to achieve the greatest efficiency, or the highest level of cooperation at the lowest cost. Using a game theoretic model, a new study has analyzed this social dilemma in order to investigate how individuals are swayed by incentives, and how cooperation can emerge due to various incentive strategies. Overall, their results show how a population can evolve to become dominated by individuals who cooperate by default (that is, they cooperate unless they know they can get away with uncooperative behavior) when faced with negative incentives. As the researchers explain in their study, the efficiency in terms of a benefit-to-cost ratio of the two types of incentives depends on the circumstances. In a society where most people cooperate, then it will be costly to reward them all, while a society in which most people defect would pay a high price for trying to punish them all. So the obvious way to transform an uncooperative population into a cooperative one would be to first provide positive incentives, and later punish the few remaining individuals who refuse to be swayed.

Read