Abstract

This paper makes use of recent empirical results, mainly from experimental economics, to expore the conditions under which people will cooperate and to assess competing explantions of this cooperation. It is argued that the evidence supports the claim that people differ in type, with some being conditional cooperators and others being motivated by more or less sophisticated forms of self-interest. Stable cooperation requires, among other things, rules and institutions that protect conditional cooperators from myopically self-interested types. Additional empirical features of the behavior of conditional cooperators also imply that rules and institutions are required to produce stable cooperation.