Overplacement Bias and Its Impact on Punishment and Cooperation Breakdown in Public Goods Games

Abstract

This study investigates the relationship between biased self-assessment and punitive behaviour in social dilemmas. Using an in-person, multi-round Public Goods Game with a punishment mechanism, we examine how player overplacement, the tendency to overestimate one’s contribution relative to others, predicts the use of costly punishment and its subsequent effect on group cooperation. Participants (N = 20) were assigned to five groups of four players. Before the game began, each player estimated their expected contribution level relative to their group’s average. During each of the ten rounds, players decided how many chips to contribute to a public pool and later had the opportunity to punish others at a personal cost. Results indicate that players who overplaced their contributions were significantly more likely to administer punishment, particularly targeting lower contributors. Furthermore, groups with overplacers exhibited a more rapid decline in cooperation over time. These findings suggest that overplacement-driven punishment is motivated more by personal grievance than cooperative enforcement, ultimately accelerating the breakdown of collective action. This study highlights the damaging role of cognitive biases in the failure of institutions designed to sustain cooperation.