Stick is hot, but carrot isn't sweet

Abstract

Sanction systems, such punishment and reward, play an important role to maintain cooperation in social dilemmas. Many empirical and experimental studies support the effect of the sanction systems. However, some studies show inconsistent results for the efficiency of punishment and reward. We conduct experiments to clarify the efficiency of punishment and reward. Our results show that punishment can promote cooperation highly than reward. Furthermore we show that players tend to overestimate the amount of punishment and underestimate the amount of reward. We consider that this misestimation of sanction leads the difference of cooperation ratio in the sanction systems.