This paper investigates how cooperation can be sustained in large societies even in the presence of agents who never cooperate. In order to do this, we consider a large but finite society where in each period agents are randomly matched in pairs. Nature decides, within each match, which agent...

Consider the following situation involving two agents who belong to a large society. One of the agents needs help to avoid a big loss. The other agent may either incur a low cost to help him or do nothing. If agents do not recognize each other, providing incentives for socially optimal behavior...