Revealing good deeds: disclosure of social responsibility in competitive markets.

We experimentally study competitive markets with socially responsible production. Our main focus is on the producers' decision whether or not to reveal the degree of social responsibility of their product. Compared to two benchmark cases where either full transparency is enforced or no disclosure is possible, we show that voluntary and costless disclosure comes close to the full transparency benchmark. However, when the informational content of disclosure is imperfect, social responsibility in the market is significantly lower than under full transparency. Our results highlight an important role for transparent and standardized information about social externalities. Supplementary Information: The online version contains supplementary material available at 10.1007/s10683-022-09752-z.

Providing personal information to the benefit of others.

Personal information is a precious resource, not only for commercial interests but also for the public benefit. Reporting personal location data, for example, may aid efficient traffic flows and sharing one's health status may be a crucial instrument of disease management. We experimentally study individuals' willingness to contribute personal information to information-based public goods. Our data provide evidence that-compared to monetary contributions to public goods-information may be substantially under-provided. We show that the degree of information provision is strongly correlated to the information's implicit (emotional and cognitive) costs. Individual's reluctance to share personal information with high implicit, in particular emotional costs, may seriously limit the effectiveness of information-based public goods.

Moral Punishment in Everyday Life.

The present research investigated event-related, contextual, demographic, and dispositional predictors of the desire to punish perpetrators of immoral deeds in daily life, as well as connections among the desire to punish, moral emotions, and momentary well-being. The desire to punish was reliably predicted by linear gradients of social closeness to both the perpetrator (negative relationship) and the victim (positive relationship). Older rather than younger adults, conservatives rather than people with other political orientations, and individuals high rather than low in moral identity desired to punish perpetrators more harshly. The desire to punish was related to state anger, disgust, and embarrassment, and these were linked to lower momentary well-being. However, the negative effect of these emotions on well-being was partially compensated by a positive indirect pathway via heightened feelings of moral self-worth. Implications of the present field data for moral punishment research and the connection between morality and well-being are discussed.

Altruistic punishment does not increase with the severity of norm violations in the field.

The degree of human cooperation among strangers is a major evolutionary puzzle. A prominent explanation is that cooperation is maintained because many individuals have a predisposition to punish those violating group-beneficial norms. A critical condition for cooperation to evolve in evolutionary models is that punishment increases with the severity of the violation. Here we present evidence from a field experiment with real-life interactions that, unlike in lab experiments, altruistic punishment does not increase with the severity of the violation, regardless of whether it is direct (confronting a violator) or indirect (withholding help). We also document growing concerns for counter-punishment as the severity of the violation increases, indicating that the marginal cost of direct punishment increases with the severity of violations. The evidence suggests that altruistic punishment may not provide appropriate incentives to deter large violations. Our findings thus offer a rationale for the emergence of formal institutions for promoting large-scale cooperation among strangers.

Direct and indirect punishment among strangers in the field.

Many interactions in modern human societies are among strangers. Explaining cooperation in such interactions is challenging. The two most prominent explanations critically depend on individuals' willingness to punish defectors: In models of direct punishment, individuals punish antisocial behavior at a personal cost, whereas in models of indirect reciprocity, they punish indirectly by withholding rewards. We investigate these competing explanations in a field experiment with real-life interactions among strangers. We find clear evidence of both direct and indirect punishment. Direct punishment is not rewarded by strangers and, in line with models of indirect reciprocity, is crowded out by indirect punishment opportunities. The existence of direct and indirect punishment in daily life indicates the importance of both means for understanding the evolution of cooperation.

The inter-group comparison-intra-group cooperation hypothesis: comparisons between groups increase efficiency in public goods provision.

Identifying methods to increase cooperation and efficiency in public goods provision is of vital interest for human societies. The methods that have been proposed often incur costs that (more than) destroy the efficiency gains through increased cooperation. It has for example been shown that inter-group conflict increases intra-group cooperation, however at the cost of collective efficiency. We propose a new method that makes use of the positive effects associated with inter-group competition but avoids the detrimental (cost) effects of a structural conflict. We show that the mere comparison to another structurally independent group increases both the level of intra-group cooperation and overall efficiency. The advantage of this new method is that it directly transfers the benefits from increased cooperation into increased efficiency. In repeated public goods provision we experimentally manipulated the participants' level of contribution feedback (intra-group only vs. both intra- and inter-group) as well as the provision environment (smaller groups with higher individual benefits from cooperation vs. larger groups with lower individual benefits from cooperation). Irrespective of the provision environment groups with an inter-group comparison opportunity exhibited a significantly stronger cooperation than groups without this opportunity. Participants conditionally cooperated within their group and additionally acted to advance their group to not fall behind the other group. The individual efforts to advance the own group cushion the downward trend in the above average contributors and thus render contributions on a higher level. We discuss areas of practical application.

On the interaction of the stick and the carrot in social dilemmas.

Recent developments in the study of social dilemmas have revealed various cooperative solutions of the "tragedy of the commons" problem. If the public goods game, i.e. the experimental paradigm of the tragedy of the commons, offers the opportunity to punish (the 'stick'), contributions to the public pool usually increase. Direct rewarding (the 'carrot') has been shown to be less effective. If, however, the social dilemma is embedded in a richer context, in which either a good reputation for cooperativeness or mutual rewarding independently pays, cooperation in the PG game may be sustained at high levels. Yet, the proposed mechanisms vary in their efficiency and whether or not in the framework, which combines the stick with the carrot; punishment is strongly reduced compared to just having the punishment option. We review and analyze the relevant literature and discuss the discrepancies.

To qualify as a social partner, humans hide severe punishment, although their observed cooperativeness is decisive.

Conflicts of interest between the community and its members are at the core of human social dilemmas. If observed selfishness has future costs, individuals may hide selfish acts but display altruistic ones, and peers aim at identifying the most selfish persons to avoid them as future social partners. An interaction involving hiding and seeking information may be inevitable. We staged an experimental social-dilemma game in which actors could pay to conceal information about their contribution, giving, and punishing decisions from an observer who selects her future social partners from the actors. The observer could pay to conceal her observation of the actors. We found sophisticated dynamic strategies on either side. Actors hide their severe punishment and low contributions but display high contributions. Observers select high contributors as social partners; remarkably, punishment behavior seems irrelevant for qualifying as a social partner. That actors nonetheless pay to conceal their severe punishment adds a further puzzle to the role of punishment in human social behavior. Competition between hiding and seeking information about social behavior may be even more relevant and elaborate in the real world but usually is hidden from our eyes.

Egalitarianism in young children.

Human social interaction is strongly shaped by other-regarding preferences, that is, a concern for the welfare of others. These preferences are important for a unique aspect of human sociality-large scale cooperation with genetic strangers-but little is known about their developmental roots. Here we show that young children's other-regarding preferences assume a particular form, inequality aversion that develops strongly between the ages of 3 and 8. At age 3-4, the overwhelming majority of children behave selfishly, whereas most children at age 7-8 prefer resource allocations that remove advantageous or disadvantageous inequality. Moreover, inequality aversion is strongly shaped by parochialism, a preference for favouring the members of one's own social group. These results indicate that human egalitarianism and parochialism have deep developmental roots, and the simultaneous emergence of altruistic sharing and parochialism during childhood is intriguing in view of recent evolutionary theories which predict that the same evolutionary process jointly drives both human altruism and parochialism.

The efficient interaction of indirect reciprocity and costly punishment.

Human cooperation in social dilemmas challenges researchers from various disciplines. Here we combine advances in experimental economics and evolutionary biology that separately have shown that costly punishment and reputation formation, respectively, induce cooperation in social dilemmas. The mechanisms of punishment and reputation, however, substantially differ in their means for 'disciplining' non-cooperators. Direct punishment incurs salient costs for both the punisher and the punished, whereas reputation mechanisms discipline by withholding action, immediately saving costs for the 'punisher'. Consequently, costly punishment may become extinct in environments in which effective reputation building--for example, through indirect reciprocity--provides a cheaper and powerful way to sustain cooperation. Unexpectedly, as we show here, punishment is maintained when a combination with reputation building is available, however, at a low level. Costly punishment acts are markedly reduced although not simply substituted by appreciating reputation. Indeed, the remaining punishment acts are concentrated on free-riders, who are most severely punished in the combination. When given a choice, subjects even prefer a combination of reputation building with costly punishment. The interaction between punishment and reputation building boosts cooperative efficiency. Because punishment and reputation building are omnipresent interacting forces in human societies, costly punishing should appear less destructive without losing its deterring force.

The competitive advantage of sanctioning institutions.

Understanding the fundamental patterns and determinants of human cooperation and the maintenance of social order in human societies is a challenge across disciplines. The existing empirical evidence for the higher levels of cooperation when altruistic punishment is present versus when it is absent systematically ignores the institutional competition inherent in human societies. Whether punishment would be deliberately adopted and would similarly enhance cooperation when directly competing with nonpunishment institutions is highly controversial in light of recent findings on the detrimental effects of punishment. We show experimentally that a sanctioning institution is the undisputed winner in a competition with a sanction-free institution. Despite initial aversion, the entire population migrates successively to the sanctioning institution and strongly cooperates, whereas the sanction-free society becomes fully depopulated. The findings demonstrate the competitive advantage of sanctioning institutions and exemplify the emergence and manifestation of social order driven by institutional selection.

Human altruism: economic, neural, and evolutionary perspectives.

Human cooperation represents a spectacular outlier in the animal world. Unlike other creatures, humans frequently cooperate with genetically unrelated strangers, often in large groups, with people they will never meet again, and when reputation gains are small or absent. Experimental evidence and evolutionary models suggest that strong reciprocity, the behavioral propensity for altruistic punishment and altruistic rewarding, is of key importance for human cooperation. Here, we review both evidence documenting altruistic punishment and altruistic cooperation and recent brain imaging studies that combine the powerful tools of behavioral game theory with neuroimaging techniques. These studies show that mutual cooperation and the punishment of defectors activate reward related neural circuits, suggesting that evolution has endowed humans with proximate mechanisms that render altruistic behavior psychologically rewarding.

Detrimental effects of sanctions on human altruism.

The existence of cooperation and social order among genetically unrelated individuals is a fundamental problem in the behavioural sciences. The prevailing approaches in biology and economics view cooperation exclusively as self-interested behaviour--unrelated individuals cooperate only if they face economic rewards or sanctions rendering cooperation a self-interested choice. Whether economic incentives are perceived as just or legitimate does not matter in these theories. Fairness-based altruism is, however, a powerful source of human cooperation. Here we show experimentally that the prevailing self-interest approach has serious shortcomings because it overlooks negative effects of sanctions on human altruism. Sanctions revealing selfish or greedy intentions destroy altruistic cooperation almost completely, whereas sanctions perceived as fair leave altruism intact. These findings challenge proximate and ultimate theories of human cooperation that neglect the distinction between fair and unfair sanctions, and they are probably relevant in all domains in which voluntary compliance matters--in relations between spouses, in the education of children, in business relations and organizations as well as in markets.