Abstract
When creating a public good, strategies or mechanisms are required to handle defectors. We first show mathematically and numerically that prior agreements with posterior compensations provide a strategic solution that leads to substantial levels of cooperation in the context of public goods games, results that are corroborated by available experimental data. Notwithstanding this success, one cannot, as with other approaches, fully exclude the presence of defectors, raising the question of how they can be dealt with to avoid the demise of the common good. We show that both avoiding creation of the common good, whenever full agreement is not reached, and limiting the benefit that disagreeing defectors can acquire, using costly restriction mechanisms, are relevant choices. Nonetheless, restriction mechanisms are found the more favourable, especially in larger group interactions. Given decreasing restriction costs, introducing restraining measures to cope with public goods free-riding issues is the ultimate advantageous solution for all participants, rather than avoiding its creation.