Abstract

Cooperation is the foundation of human social life, but it sometimes requires individuals to choose against their individual self-interest. How then is cooperation sustained? How do we decide when instead to follow our own goals? I develop a model that builds on Bacharach (in: Gold, Sugden (eds) Beyond individual choice: teams and frames in game theory, 2006) ‘circumspect we-reasoning’ to address these questions. The model produces a threshold cost/benefit ratio to describe when we-reasoning players should choose cooperatively. After assumptions regarding player types and beliefs, we predict how the extent of cooperation varies across games. Results from two experiments offer strong support to the models and predictions herein