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Competitive Advantage Are Attained In Which Freeloaders Are Punished

h polluters might be cleaner and thus more popular than a more polluted nearby town whose inhabitants do not punish polluters, the scientists found that a group that punishes or threatens to punish its freeloaders holds a competitive advantage over a nearly identical group that has no mechanism for punishing freeloaders. In the laboratory, the participants were asked to join a punishing or a nonpunishing group and received 20 "monetary units" to manage, with the instruction that the more money they amassed for themselves during the experiment, the more money they would be paid at the end of the experiment.

Players could choose to contribute money to a group project or deposit the money in a private account. All contributions to the group project were increased by about two thirds and divided equally among all players, regardless of their contributions. After the players made their contributions and learned of the contributions of others, those in the punishing group had the option to punish non-cooperating group members. Punishing another person reduced the payoff of the punisher by one unit and the person being punished by three units. At the end of the punishing period, all participants from both groups received detailed but anonymous payoff information about each of the other members of both institutions.

At this point in the game, people could choose to stay in their own group for the next round, or switch to the other group. At the start of the first round of the game, two thirds of the study participants chose the punishment-free group. After the first few rounds, members of the nonpunishing group who initially behaved cooperatively by contributing to the group project scaled back their contributions after seeing that others were freeloading. Many of these initially punishment-averse people switched over to the punishing group and immediately adopted the established culture of cooperation. The former freeloaders contributed significantly t
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