So how do we restore cooperation? Positive experiences aren’t enough. Even when punishment was perfectly prosocial (Exp 3), cooperation never fully recovered. Only when paid punishers could only punish selfish behavior (Exp 4) was cooperation restored.

And partly because dictators and receivers saw the system differently. Receivers trusted paid punishers more, viewed dictators as selfish, and prioritized prosocial punishment. Dictators were more skeptical of paid punishers and concerned about being treated fairly (Exp 8)

Partly because of lay theories: most receivers assumed that paying punishers would increase cooperation (Study 7).

When we asked receivers whether they preferred games with incentivized or non-incentivized punishers, most chose incentivized. Ironically, this cut their own payments by ~20% (Study 6). Why did they choose to incentivize punishers?

In our follow-up experiments, we found that cooperation collapsed because people trusted incentivized punishers less and that the introduction of financial incentives shifted norms from cooperation to self-interest (Exp 9).

When we incentivized punishers, the classic effect flipped: instead of boosting cooperation, the introduction of punishers decreased it across both one-shot (Exp 1) and repeated games (Exp 2).

In our games, a dictator (Player 1) decides whether to share with a receiver (Player 2). A punisher (Player 3), after witnessing the dictator's decision, can decide to remove money from the dictator. In some conditions, punishers earned a small bonus each time they punished.

What explains the disconnect between our economic games and the real-world? We theorized that one reason is that punishers often have incentives to punish. These ulterior motives can undermine the communicative function of punishment and weaken its ability to foster cooperation.

Lastly, we hope this data contributes to the ongoing debate and the growing bipartisan consensus to limit stock trading by members of Congress.

Couldn't have done this without @unusualwhales.bsky.social great reporting on the subject! Check out their report for 2024 which we used as our experimental manipulation: unusualwhales.com/congress-tra...