Incentivized punishment destabilizes cooperation

Across eight economic games and survey experiments, we find that incentivizing third parties to punish destabilizes cooperation. When punishment is profitable, rates of cooperation decrease immediately, remain lower regardless of punishment feedback, and can only be restored by explicitly signaling that incentives are restricted to prosocial punishment. When we allow recipients of cooperation to choose the punishers they are paired with, they inadvertently reduce their own payouts by choosing incentivized punishers. Survey experiments suggest that these effects occur because recipients trust punishers more than dictators, care more about promoting prosocial punishment than preventing antisocial punishment, and that the introduction of incentives reframes social norms. Our results suggest that any effects of punishment on cooperation may be driven more by what it communicates about punishers’ intentions and social norms than by the imposition of material costs alone. Implications for criminal justice and systems of punishment are discussed.