The Effect of Centralized Financial and Social Incentives on Cooperative Behavior and Its Underlying Neural Mechanisms

Abstract

Incentives are frequently used by governments and employers to encourage cooperation. Here, we investigated the effect of centralized incentives on cooperation, firstly in a behavioral study and then replicated in a subsequent neuroimaging (fMRI) study. In both studies, participants completed a novel version of the Public Goods Game, including experimental conditions in which the administration of centralized incentives was probabilistic and incentives were either of a financial or social nature. Behavioral results showed that the prospect of potentially receiving financial and social incentives significantly increased cooperation, with financial incentives yielding the strongest effect. Neuroimaging results showed that activation in the bilateral lateral orbitofrontal cortex and precuneus increased when participants were informed that incentives would be absent versus when they were present. Furthermore, activation in the medial orbitofrontal cortex increased when participants would potentially receive a social versus a financial incentive. These results speak to the efficacy of different types of centralized incentives in increasing cooperative behavior, and they show that incentives directly impact the neural mechanisms underlying cooperation.