Mere Threat of Punishment Can Banish Freeloaders

by Hannah Punitha on Dec 7 2008 3:40 PM

A new study has found that a mere threat of punishment can banish freeloaders and encourage them to cooperate with others, thus transforming them into responsible members of society.

Freeloader is a person who refuses to do work without valid excuses/reasons for being non-contributing to the work being done.

Previous studies have claimed that while punishing freeloaders can increase their cooperation with others, the punishment itself was too costly and in the end, punishment wouldn't be worth it.

However, the new research has shown that the fear of punishment can keep freeloaders in check and increase pro-social behaviour, such as helping others or sharing with them.

Over the long term, punishment gets ingrained in people's psyches in a way that causes them to fear getting into trouble.

"I believe the experimental work is extremely important and timely, as many researchers had voiced concern whether punishment is not too costly a tool to promote cooperation," Live Science quoted said Karl Sigmund of the University of Vienna, who was not involved in the current study.

During the study, lead researcher Simon Gachter, a professor of the psychology of economic decision making at the University of Nottingham in England had 69 groups of three individuals playing money games.

Each participant received 20 tokens and had to decide how many tokens to keep and how many to contribute to a group project. Keeping a token meant a person gained the token's total worth. For each token contributed, every participant would earn 0.5 money units, regardless of his or her own contribution.

If all tokens are kept by members, each group member will earn 20 money units; if all tokens are put into the community pot, each member will earn 30 money units.

The participants were further split into groups, with each group playing either 10 or 50 rounds of the game and either having the ability to punish other group members or having no punishment abilities.

As for the punishment, a player could deduct tokens from others after finding out the players' contributions.

The study showed that the threat of punishment actually works.

There were far fewer freeloaders, or players who kept all the tokens for themselves, in the games that allowed punishment compared with the no-punishment games.

"The reason why this works is that there are actually people out there who are willing to sacrifice to punish the freeloaders," Gachter said.

"The freeloaders now stop freeloading, they start cooperating more, but it also takes a lot of punishment to get them there," he added.

The earnings were high in the long-term punishment game because people not only cooperated more, contributing more tokens to the shared pot, there was also less punishment needed, so fewer tokens got deducted from players.

"In the long run, [punishment] is not detrimental, because the freeloaders now know there are punishers out there," Gachter said.

"So punishment just works as a threat. Everybody behaves nicely because they fear punishment. Therefore, punishment is very rarely needed," he added.