Gossip Versus Punishment: The Efficiency of Reputation to Promote and Maintain Cooperation

Abstract

Prior theory suggests that reputation spreading (e.g., gossip) and punishment are two key mechanisms to promote cooperation in groups, but no behavioral research has yet examined their relative effectiveness and efficiency in promoting and maintaining cooperation. To examine these issues, we observed participants interacting in a four-round public goods game (PGG) with or without gossip and punishment options and a subsequent two-round trust game (TG). We manipulated gossip as the option to send notes about other group members to these members’ future partners and punishment as the option to assign deduction points to reduce other group members’ outcomes with a fee-to-fine ratio of 1:3. Findings revealed that in the four-round PGG, the option to gossip increased both cooperation and individual earnings, whereas the option to punish had no overall effect on cooperation (but a positive effect on cooperation in the last two rounds of the PGG) and significantly decreased individual earnings. Importantly, the initial option to gossip made people more trusting and trustworthy in the subsequent TG when gossip was no longer possible, compared to the no-gossip condition. Thus, we provide some initial evidence that gossip may be more effective and efficient than punishment to promote and maintain cooperation.