Incentives and opportunism: from the carrot to the stick

Abstract

Cooperation in public good games is greatly promoted by positive and negative incentives. In this paper, we use evolutionary game dynamics to study the evolution of opportunism (the readiness to be swayed by incentives) and the evolution of trust (the propensity to cooperate in the absence of information on the co-players). If both positive and negative incentives are available, evolution leads to a population where defectors are punished and players cooperate, except when they can get away with defection. Rewarding behaviour does not become fixed, but can play an essential role in catalysing the emergence of cooperation, especially if the information level is low.