Reciprocity : Weak or Strong? What Punishment Experiments Do (and Do Not) Demonstrate

Strong Reciprocity theorists claim that cooperation in social dilemma games can be sustained by costly punishment mechanisms that eliminate incentives to free ride, even in one-shot and finitely repeated games. There is little doubt that costly punishment raises cooperation in laboratory conditions. Its efficacy in the field however is controversial. I distinguish two interpretations of experimental results, and show that the wide interpretation endorsed by Strong Reciprocity theorists is unsupported by ethnographic evidence on decentralised punishment and by historical evidence on common pool institutions. The institutions that spontaneously evolve to solve dilemmas of cooperation typically exploit low-cost mechanisms, turning finite games into indefinitely repeated ones and eliminating the cost of sanctioning