When attempting to avoid global warming, individuals often face a social dilemma in which, besides securing uncertain future benefits, it is also necessary to reduce the chances of future losses. In this talk, I will resort to mathematical models and lab experiments to discuss different institutional approaches to this type of dilemmas. Inspired by the design principles proposed by the late Nobel Laureate Elinor Ostrom, I will discuss the evolution and impact of a new form of institutional sanctioning, where punishment is graduated, growing with the incidence of free-riding. We develop an analytical model capable of identifying the conditions under which this design principle is conducive to the self-organization of stable institutions and cooperation, and in which conditions rewards may outperform sanctions. In particular, we show that rewards are essential to initiate cooperation, whereas sanctions are instrumental in maintaining cooperation. Altogether, our results are gratifying, given the prior limitations of effectively implementing strict forms of sanctioning in international agreements. Finally, if time allows, I will discuss some preliminary results on the impact of technology and artificial intelligence in this class of social dilemmas.
