Sticks and Carrots: Two Incentive Mechanisms Supporting Intra-Group Cooperation

In this note, we introduce two distinct incentive mechanisms that support dynamic intra-group cooperation in the context of prisoner’s dilemma pay-offs. The first mechanism involves a reward for cooperating, where the rewarding party may be outside a given relationship. The second mecha-nism involves a punishment for defection, where the punishing party may be outside the relationship. We also discuss how these mechanisms are relevant in real-world groups such as criminal gangs and military platoons