The role of altruism in economic interaction

Abstract This paper considers environments in which the population consists of a mix of altruists and egoists, and asks under what situations do altruists have a disproportionately large effect on equilibrium, and under what situations is it the egoists. We begin by presenting a general framework for answering this question. We then apply the framework to the analysis of three economic environments: (1) the classic problem referred to as the Prisoner's Dilemma; (2) a world where agents decide whether or not to pollute the environment; and (3) a world where agents decide whether or not to donate blood.

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