Cooperation and evolutionary dynamics in the public goods game with institutional incentives

The one-shot public goods game is extended to include institutional incentives (i.e. reward and/or punishment) that are meant to promote cooperation. It is shown that the Nash equilibrium (NE) outcomes predict either partial or fully cooperative behavior in these extended multi-player games with a continuous strategy space. Furthermore, for some incentive schemes, multiple NE outcomes are shown to emerge. Stability of all these equilibria under standard evolutionary dynamics (i.e. the replicator equation and the canonical equation of adaptive dynamics) is characterized. (c) 2011 Elsevier Ltd. All rights reserved.