ZEF Discussion Papers on Development Policy No. 59
We calculate the equilibrium fraction of cooperators in a population in which payoffs accrue from playing a single-shot prisoner's dilemma game. Individuals who are hardwired as cooperators or defectors are randomly matched into pairs, and cooperators are able to perfectly find out the type of a partner to a game by incurring a recognition cost. We show that the equilibrium fraction of cooperators relates negatively to the population's level of wealth.