Institutional incentives for the evolution of committed cooperation: ensuring participation is as important as enhancing compliance

Abstract

Both conventional wisdom and empirical evidence suggest that arranginga priorcommitment or agreement before an interaction takes place enhances the chance of reaching mutual cooperation. Yet it is not clear what mechanisms might underlie the participation in and compliance with such a commitment, especially when participation is costly and non-compliance can be profitable. Here, we develop a theory of participation and compliance with respect to an explicit commitment formation process and to institutional incentives where individuals, at first, decide whether or not to join a cooperative agreement to play a one-shot social dilemma game. Using a mathematical model, we determine whether and when participating in a costly commitment, and complying with it, is an evolutionarily stable strategy, resulting in high levels of cooperation. We show that, given a sufficient budget for providing incentives, rewarding of commitment compliant behaviours better promotes cooperation than punishment of non-compliant ones. Moreover, by sparing part of this budget for rewarding those willing to participate in a commitment, the overall level of cooperation can be significantly enhanced for both reward and punishment. Finally, the presence of mistakes in deciding to participate favours evolutionary stability of commitment compliance and cooperation.