Co-evolution of Social Reward and Punishment under Institutional Interventions

This paper studies how peer and institutional incentives jointly affect cooperation, social welfare, and enforcement efficiency in a four-strategy Prisoner’s Dilemma involving unconditional cooperators, defectors, social punishers, and social rewarders. It combines four-strategy replicator dynamics in infinite well-mixed populations with agent-based simulations on square lattices. The reported results suggest that peer punishment most strongly promotes cooperation, while peer reward better supports social welfare. Institutional rewards for peer-incentive strategies improve both outcomes, whereas institutional punishment is consistently effective only when directed at defectors; punishing incentive strategies can dismantle decentralised enforcement.