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person contributed. If people act in their rational self-interest, then theywill withdraw as much as possible and contribute as little as possible inthe two games, even though minimum withdrawal and maximum contributiongenerate the greatest wealth for the group as a whole.Once again, experimental evidence fails to support conventional economics’assumption that people act only out of pure self-interest. Mostpeople in the voluntary contribution game contribute something to thecommon pool. University students tend to contribute 40%–60% of thetotal amount they are given, on average, with one mode at zero contributionand a typically smaller one at full contribution. However, in repeatedgames either among the same group or with different group members (i.e.,each person plays the game multiple times but with different people),contribution rates fall. It appears that those who initially cooperate engagein a tit for tat strategy: the most generous individuals decrease their contributionsto the mean contribution, which further drives down the mean. 28Is there a way to avoid this suboptimal outcome? In one variation ofthe game, participants learn after each round who contributed and howmuch, and they are allowed to punish those who did not contribute. Punishmentis costly; for example, the punisher may have to give up 1/3 unitof reward to punish defectors by 1 unit. Yet when punishment is allowed,the rates of cooperation go up with repeated rounds, not down. This is anotherexample of altruistic punishment and helps explain the significanceof the term: individuals sacrifice their own welfare to make defection alosing strategy, encouraging cooperation even from people who are purelyselfish, and even when they make up a significant percentage of the group.In other words, altruistic punishment can make cooperation the dominantstrategy in prisoner’s dilemma-type situations, even for selfish individuals.One could argue that in a repeated public-good game, the punisher is ultimatelyrewarded by increased cooperation in future rounds, but in theultimatum game described earlier players are not rewarded for altruisticbehavior. Clearly, altruism plays a role in both. In fact, it’s interesting tonote that neuroeconomic studies, which measure brain activity, find thatthe same areas of the brain are stimulated by altruistic punishment as arestimulated by receiving money. 29Altruistic punishment is not the only way to achieve cooperation, however.If participants in experimental games are allowed to talk about theirChapter 13 Human Behavior and Economics • 24728 “Tit for tat” simply means acting toward your partners as they acted toward you in the previousround. In a famous experiment, tit for tat was found to be the most successful overall strategyin repeated prisoner dilemma games (R. Axelrod, The Evolution of Cooperation, New York: BasicBooks, 1984).29 C. Camerer, M. Bhatt, and M. Hsu, “Neuroeconomics: Illustrated by the Study of Ambiguity-Aversion.”In B. S. Frey and A. Stutzer, eds., Economics and Psychology: A Promising New Cross-Disciplinary Field, Cambridge, MA: MIT Press, 2007.