How Altruism Can Prevail in an Evolutionary Environment

Why are economists convinced that {\it homo economicus}\/ is selfish? No doubt we find considerable support for this hypothesis in the behavior of our colleagues. Beyond this, a plausible evolutionary argument for selfishness would assert that if natural selection favors those who receive high payoffs, and if altruists get lower payoffs than selfish individuals, then evolution will tend to eliminate altruists. In this paper, we will show that, paradoxically, evolution can sustain cooperative behavior between relatives or neighbors even in single-shot prisoner's dilemma models, where cooperation benefits one's opponent at a cost to oneself.