The Detrimental Effects of Punishment and Reward on Cooperation in the Industrial Waste Illegal Dumping Game

Background. Many studies have shown that sanctions promote cooperation in social dilemma situations. However, it has also been suggested that sanctions have a negative effect. The interactions among people and systems need to be considered to examine the consequences of sanctions. Aim. We examined whether rewards and mutual punishment increased non-cooperation. We regarded illegal industrial waste dumping as a social dilemma in which everyone bears the burden of the cost of illegal dumping, legal treatment is cooperative behavior, and illegal dumping is non-cooperative behavior. Method. We used the Industrial Waste Illegal Dumping Game. This game simulates the structure of industrial waste treatment (incomplete surveillance, various industries with different roles and payoffs, cost of cooperation, etc.) in addition to the social dilemma structure. Players take on roles in industrial waste treatment, negotiating and dealing with other players, and treating industrial waste. We set three conditions. In the reward condition, players can earn rewards by rapidly treating industrial waste. In the mutual punishment condition, players can mutually monitor and punish each other. In the control condition, neither reward nor punishment exists. Results. Non-cooperation occurred more frequently in the reward condition than in the control condition. Conversely, there was no difference in non-cooperation between the mutual punishment and control conditions. Players under the reward condition did not gather information proactively, and information on benefits was not shared. Conclusion. This study showed that sanctions caused non-cooperation. Social dynamics should be considered when evaluating the effectiveness of sanctions. Gaming allows us to examine social consequences, including social dynamics, which leads to discoveries not possible through traditional methods.