This chapter examines how social preferences contribute to human cooperation. It considers experimental and other evidence showing that even in one-shot interactions many individuals, most in some settings, willingly cooperate with strangers even at a cost to themselves. Moreover, they enthusiastically punish shirkers who seek to exploit the cooperation of others. These findings pose the evolutionary puzzle: how did humans come to have these social preferences? The chapter begins with a discussion of strong reciprocity and how free-riders undermine cooperation, followed by an analysis of how altruistic punishment enhances cooperation among members of a group. It then explores the tendency of people to punish those who hurt others, the rationality of social preferences, and the influence of culture and institutions on social preferences. It also explains how behavior is conditioned on group membership and concludes with an assessment of competing explanations about the importance of social preferences.
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