Costly Punishment Is Not a Winning Strategy

Costly punishment—in which one person punishes another at a cost to himself—rarely pays off, according to a new study by Harvard University mathematician and biologist Martin Nowak and his colleagues Hisashi Ohtsuki and Yoh Iwasa that appears in last week's edition of the journal Nature. In fact, Nowak says, "efficient cooperation cannot be based on punishment. This is a very positive result."
To study cooperation and punishment, the scientists created a computer simulation of a population in which each interaction leads to either a good or bad reputation; cooperation leads to a good reputation, while not cooperating leads to a bad one. Players could then choose whether to cooperate, punish, or opt out of interactions with another player—based on their observations of the other person and information about the person's past decisions with other players. "Our behavior toward other people depends not only on what they have done to us but also on what they have done to others. Indirect reciprocity works through reputation," the researchers write.
When asked if they want to donate money to another person, for example, the "experiment shows that people base their decisions on what the recipient has done before. Generous people are more likely to receive donations," writes Nowak in an essay that appeared in an earlier edition of Nature. Because we spend most of our lives in a relatively small population in which we interact with the same people over and over again, we continually monitor and interpret how others act toward us and others. "When deciding how to act, we take into account—often subconsciously—the possible consequences for our own reputation," Nowak says. "Moreover, our own observations are often not enough; we want to learn from the experiences of others."
Punishment, the researchers found, is only a successful strategy when our assessment of other people's reputations—and what others say about them—is reliable; in real life, however, perception and gossip can often lead to errors. In most cases, then, a population does better by not using punishment; instead, the best strategy is to withhold help from someone you think has a poor reputation or has made unfavorable decisions in the past. —Heather Wax