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Co-operation and punishment

Face saving and free riding

By Jennifer Stern

, |

Co-operation and punishment

Face saving and free riding

By Jennifer Stern

, |

4 min read

We know that living in a community is all about co-operating – balancing freedom and fairness – but all too often it breaks down into a tit-for-tat trade-off of rights vs responsibilities, contribution vs compensation and reward vs retribution.

There’s a lot of emotion tied up in this, and it has been the subject of many studies by sociologists, economists, philosophers, political scientists and game theorists.

Why free riding hurts

One of the most difficult issues to deal with in communities is the issue of free riding. If almost everyone picks up their litter, or refrains from ‘liberating’ communal property, the estate will continue just fine. But what about that one resident who leaves – just a few – cigarette ends on the golf course? Or the person who never picks up their dog poo? Or the person who takes a newspaper out of the clubhouse early every morning – the HOA buys six or seven copies, so there are still enough for people to read with their breakfast. Right? So what’s the harm?

The actual damage is minimal, but the emotional toll of that damage can be extensive. It’s not just that the offender is taking a free ride, it’s that those who are compliant feel they are being taken for a ride. In a paper published in The American Economic Review, Ernst Fehr and Simon Gächter show how people so much resent being a ‘sucker’ that they are willing to punish free riders ‘even if punishment is costly and does not provide any material benefits for the punisher’. We’re not talking public flogging here, just a way of decreasing the payoff for free riding.

The classic prisoners’ dilemma

Fehr and Gächter based their research on the classic prisoners’ dilemma game, in which two (guilty) suspects have to decide whether to co-operate with each other to both get a lesser sentence, or to ‘squeal’ on their accomplice and get off scot-free while the accomplice gets a higher sentence. Of course, they may not communicate with each other. It all turns on what the other person will do. Not surprisingly, most players take a free ride – if they think they can get away with it. And, interestingly, if the game is played repetitively, the players tend to base their strategy on the results of the previous game, and it seems to even out mostly to co-operation. This changes if the players know that the game will be repeated a finite number of times. Obviously, the last time, it will pay to drop the other player and take a free ride. Unless, of course, the other player has already worked that out, in which case it may make more sense to drop the other player into the dwang on the penultimate round. This mind experiment is a classic for a reason – it’s really not that simple.

Is free riding really free?

Fehr and Gächter’s results indicated that people will tend to bend the rules to their advantage – i.e. take a free ride – if and when they can get away with it. After a number of iterations of the game, the results showed something interesting – and not at all surprising. People were most likely to free-ride if:

  • they did not know the other people in the game
  • the game was played repetitively so that they could change their strategies according to the previous outcome.

The advantages of co-operation

But, as Mike Farjam et al. point out in a paper in the Journal of Artificial Societies and Social Stimulation, there are many advantages of co-operation. In fact, co-operation is one of humanity’s most defining characteristics. So, why do some people not co-operate? This, they state, is because – at an individual level – ‘the most efficient choice seems to be enjoying the fruits of co-operation, without investing in it,’ or to take a free ride. But something all these experimenters find hard to recreate is that certain innate je ne sais quoi that makes people behave decently. We here in South Africa call it ubuntu, but it’s more than that. Farjam et al.’s study showed that, while punishment did have some effect, the concept of indirect reciprocity was more influential. In a nutshell, indirect reciprocity is the principle that people are more likely to behave altruistically if others do – even if they do not directly benefit from it. It seems that the positive reinforcement of possible future reciprocity is as effective in shaping behaviour as the negative reinforcement of possible punishment.

So what does this tell us about the real lives of real people in real estates?

Co-operation and punishment in real life

The most important thing to bear in mind about studies like this – and about the prisoners’ dilemma – is that they are artificial constructs. The rules are imposed by the researchers, and the subjects have no control over them. But, as Nobel Prize winner Elinor Ostrom showed, they are not necessarily relevant in the real world. In the real world, people have agency – and people have agency in residential estates, too. And you probably know that. Communities – including estates – in which the members know and trust each other, communicate freely and offer assistance when necessary are more successful. So – and this is not likely to be news to you – there are real advantages in ensuring that the residents of an estate form a cohesive community.

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