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Understanding the proximate and ultimate sources of human cooperation is a fundamental issue in all behavioural sciences. In this paper the authors review the experimental evidence on how people solve cooperation problems. Existing studies show without doubt that direct and indirect reciprocity are important determinants of successful cooperation. They also discuss the insights from a large literature on the role of peer punishment in sustaining cooperation. The experiments demonstrate that many people are "Strong reciprocators" who are willing to cooperate and punish others even if there are no gains from future cooperation or any other reputational gains. They document this in new one-shot experiments which they conducted in four cities in Russia and Switzerland.
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