Simon Gächter

Simon Gächter is an economist whose experiments with Ernst Fehr show that cooperation depends not only on individual incentives but also on whether people believe others are contributing fairly. Their public-goods studies trace how free riding can erode cooperation and how the opportunity to punish defectors can reverse that decline, making the experiments a concrete account of how rules shape collective behavior.

The public-goods experiment

In the game described in the book, four participants each begin with twenty tokens and play four rounds. On each round, a participant can contribute tokens to a shared pot or keep them. Contributing costs the individual: for every token invested, that person receives only 0.4 tokens in return. But each of the other three participants also receives 0.4 tokens, so the group gains 1.6 tokens for every token contributed. If everyone keeps their tokens, each finishes with twenty; if everyone contributes everything, each finishes with thirty-two. The individual incentive to free ride is therefore in tension with the group’s greater return from cooperation.

In experiments conducted across the developed world, most participants do not begin by behaving selfishly. They initially contribute about half their tokens. As rounds pass and they observe others free riding, however, contributions fall. By the end, 70 to 80 percent of participants are free riding, leaving the group substantially poorer than it would have been with sustained contributions. The sequence matters: willingness to contribute is tested against visible evidence that others may be taking advantage.

Conditional cooperation and punishment

Fehr and Gächter distinguish three broad patterns of behavior. About a quarter of participants are consistently selfish, in the economic sense, and free ride from the start. A small minority contribute heavily from the beginning and continue even when others do not reciprocate. The largest group consists of conditional consenters: they contribute at first, but become less willing to do so as they see others withholding their share. By the end of most games, nearly all of these conditional cooperators have stopped cooperating.

The researchers tested how to keep this largest group from feeling that cooperation makes them suckers. In a modified game, the experimenters disclosed everyone’s contributions after each round, making free riders visible, and allowed participants to punish them. A participant could spend one-third of a token to take one token away from a free rider. Participants did spend money to punish, despite the personal economic cost. Free riders then began contributing their fair share. Contributions continued even in the final rounds, when punishment was no longer possible, suggesting that the effect did not depend only on an immediate threat of further penalties.

What the experiments show

The experiments connect cooperation to both information and enforcement. Participants need to know whether others are contributing, and the possibility of responding to free riding changes the incentives within the group. Punishment is individually costly, yet participants use it; the resulting change in free riders’ behavior benefits the group. The outcome challenges a simple account in which everyone acts only to maximize personal material returns.

The book places this evidence alongside a broader account of collective decisions. In a separate experiment discussed there, Angela Hung and Charles Plott show how rules can make people attend more to their private information and improve a group’s judgment. Fehr and Gächter’s work addresses a different problem: not how to aggregate information, but how to sustain contributions when individuals can benefit by withholding them. Together, the cases illustrate how collective outcomes depend on the arrangements that govern individual choices.

Significance

The public-goods findings also illuminate why cooperation is conditional rather than automatic. When participants see others free riding, they reduce their own contributions; when free riding becomes visible and punishable, cooperation can recover. In the book’s account, the practical challenge is to preserve the willingness of conditional consenters to contribute without allowing free riders to make cooperation seem one-sided. Gächter’s experiments thus offer a behavioral explanation of how fairness, monitoring, and sanctions can support a shared resource.