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What adding the punishment issue does is that it reduces the payoff from ‘unhealthy’ activities and modifications the matrix like this: See how the payoff from the ‘bad’ exercise for deduced by an element of 7? As you probably can see, by including the punishment factor, the Nash Equilibrium modifications from something that would have been bad for the society to something that is good for the society. So it changes from, Ben and Rob doing the bank heist to Ben and Rob doing the financial institution heist but additionally going through the implications of a punishment. So, going again to the question, what is the incentive for a society to go through the punishment, play for free slots.
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