Game theory (interactions)
A caveat
Cooperation has a positive connotation, gossip less so; neither are inherently good—especially
some gossip.
However, thugs cooperate to harm the innocent, and gossip plays a role in silencing victims and
their communities (e.g., in omertà, “snitches get stitches,” and the “blue wall of silence” group
members gossip to identify who “defected.”)
Ultimatum game
I need 2 volunteers.
- I give $10 to the Divider, who decides how to divide it with the
Recipient (0-100%).
- The Recipient decides whether the division is acceptable or if
the whole deal is scratched.
. . .
Did the Recipient choose to penalize herself to punish the
Divider?
3rd-party variation
I need 3 volunteers.
- I give $10 to the Divider, who decides how to divide it with the
Recipient (0-100%) .
- I give $5 to the 3rd-party.
- The Recipient receives whatever the Divider chose.
- The 3rd-party can pay to penalize the Divider: for every $1
she spends, the Divider loses $2.
Did the 3rd party pay to punish?
- Altruistic punishment
-
punish, perhaps at one’s own expense, someone else with no immediate personal gain.
-
60% of 3rd-parties choose to pay to punish the Decider if
she shares less than half her endowment.
- Though perhaps this game should be called “costly punishment” and we ought remember “winners
don’t punish.” (Nowak 2012,
p. 31)
Evolution of cooperation
What strategy does best when playing over multiple rounds?
- always cooperate?
- always defect?
- random/unpredictable?
Tit-for-tat
In 1980s Axelrod held tournaments for different strategies/programs (Axelrod 1984)

Tit-for-tat, do what the opponent did, scored well, it cooperated with
cooperators and punished defectors
Solutions to social dilemmas
- government intervention
- privatization
- Ostrom’s institutions of collective action (boundaries, rules, graduated sanctions)
- altruistic punishment: paying a small cost to punish a violator without direct benefit (e.g.,
telling someone who cut in line behind you to go to the end of the line)
- trust & culture
Social dilemmas (Policy/Econ)
If cooperation is so powerful, why do group projects so often suck?
Tragedy of commons (ToC)
ToC conditions
What to do?
Examples of cooperation, privatization, & regulation?
Public goods
PG conditions
beware of free-riders!
ToC or PG??
ToC or PG online??
. . .