The cost of noise: stochastic punishment falls short of sustaining cooperation in social dilemma experiments

Abstract: Identifying mechanisms able to sustain costly cooperation among self-interested agents is a central problem across social and biological sciences. One possible solution is peer punishment: when agents have an opportunity to sanction defectors, classical behavioral experiments suggest that cooperation can take root. Overlooked from standard experimental designs, however, is the fact that real-world human punishment -- the administration of justice -- is intrinsically noisy. Here we show that stochastic punishment falls short of sustaining cooperation in the repeated public good game. As punishment noise increases, we find that contributions decrease and punishment efforts intensify, resulting in a $45\%$ drop in gains compared to a noiseless control. Moreover, we observe that uncertainty causes a rise in antisocial punishment, a mutually harmful behavior previously associated with societies with a weak rule of law. Our approach brings to light challenges to cooperation that cannot be explained by economic rationality and strengthens the case for further investigations of the effect of noise -- and not just bias -- on human behavior.