Ernst Fehr

Ernst Fehr is an economist whose experiments with Simon Gächter illuminate a central tension in collective life: people may benefit individually by withholding contributions, yet shared prosperity depends on enough people contributing. Their public-goods research shows how conditional cooperation can erode when free riding goes unchecked—and how visible sanctions can help restore it.

Public-Goods Experiments

Fehr and Gächter’s experiment places four people in a group, each holding twenty tokens, and runs for four rounds. On each round, a participant can keep tokens or contribute them to a shared pot. A contributed token costs its owner one token, but returns 0.4 tokens to each of the four group members: the contributor receives only 0.4 personally, while the group gains 1.6 altogether. If everyone keeps their tokens, each finishes with twenty; if everyone contributes all of them, each finishes with thirty-two. The individually tempting strategy is to contribute nothing and benefit from others’ investments, but universal free riding leaves the group with no contributions.

The experiments, conducted in a similar form throughout the developed world, do not begin with universal selfishness. Most participants initially contribute about half their tokens. As the rounds proceed and they see others free ride, however, contributions decline. By the final round, 70 to 80 percent of players are free riding, leaving the group poorer than it would have been if cooperation had continued.

Conditional Cooperation and Fairness

Fehr and Gächter describe three broad participant types. Roughly a quarter are consistently selfish in the economic sense and free ride from the outset. A small minority are altruists who contribute heavily from the beginning and continue even when others withhold their share. The largest group consists of conditional consenters: they start by contributing, but become less willing to do so when they believe others are taking advantage of them. By the end of most games, almost all of these conditional contributors have stopped cooperating.

The pattern makes the group’s outcome depend not only on the private cost of contributing, but also on what participants observe about one another. The conditional consenters’ initial willingness to contribute is vulnerable to evidence that cooperation is not being reciprocated. Once that belief spreads, individual withdrawal reinforces a collective decline.

Punishment and the Return of Cooperation

Fehr and Gächter tested whether making free riding visible and punishable could interrupt that decline. At the end of each round, participants learned how much each person had contributed and could pay one-third of a token to take one token away from a free rider. Participants chose to spend their own resources to punish those who withheld contributions, despite the personal cost and the narrow economic irrationality of doing so.

The punishments changed behavior: free riders began contributing their fair share. Cooperation also persisted into the later rounds, including rounds in which punishment could no longer be imposed. The result suggests that sanctions did more than threaten immediate losses; once free riding was checked, participants continued to contribute even after that enforcement was removed. Fehr and Gächter’s experiments thus connect collective prosperity to the preservation of conditional consent: people are more likely to keep cooperating when they do not feel that doing so makes them suckers.