Direct Reciprocity Under Uncertainty Does Not Explain One-Shot Cooperation, But It Can Explain Norm Psychology

Abstract

Humans in many societies cooperate in economic experiments at much higher levels than would be expected if their goal was maximizing economic returns even when interactions are anonymous and one-shot. This is a puzzle because paying a cost to benefit another player in one-shot interactions has no direct benefit to the cooperator. This paper explores the logic of two competing evolutionary hypotheses to explain this behavior. The \"norm psychology\" hypothesis holds that a players choice of strategy is heavily influenced by socially-learned cultural norms. Its premise is that over the course of human evolutionary history, cultural norms varied considerably across human societies and through a process of gene-culture co-evolution, humans evolved mechanisms to learn and adopt the norms of their particular society. The \"evolutionary mismatch\" hypothesis holds that pro-social preferences evolved genetically in our hunter-gatherer past where one-shot anonymous interactions were rare and these evolved \"protocols\" for cooperation are misapplied in modern, laboratory, conditions. I compare these hypotheses by adopting a well-known model of the mismatch hypothesis. I show that the cooperation generated by the model is based on a flawed assumption - that the best thing to do is cooperate in a repeated game. I show that repeated games generate a great diversity of behavioral equilibria, in support of the norm psychology hypothesiss premise. When interaction is repeated, adopting local norms is a more evolutionarily successful strategy than automatically cooperating. If various groups are at different behavioral equilibria, then cultural selection between groups tends to select for cooperative behavior.