Sociological and biological observations of humans and animals show that cooperation is an inherent part of human life and the life of many animals. This poses two questions: how do cooperative strategies become stable within evolution? And, how does cooperation emerge initially? Even though researchers have tried to answer these questions for at least a century, existing models do not fully explain why cooperation evolves. There are five major approaches: Group Selection, Kinship Theory, Direct Reciprocity, Indirect Reciprocity, and Social Learning. Each of these models explain only a few aspects of cooperation and might be improved by dropping some unrealistic assumptions: asexual and non-overlapping generations, simultaneous-play for every interaction, dyadic interactions, mostly predetermined and mistake-free behavior, discrete actions (cooperate or defect), and the trivial role of social structure and social learning of individuals.

A useful Institutional Analysis and Development (IAD) framework has evolved under the leadership of the Ostroms and their colleagues at Indiana University for over two decades. It has been applied with success in laboratory experiments on social behavior and in field studies and has enabled the creation of useful models with predictive value in diverse situations. Some results from the application of the IAD framework have lead to suggestions for effective use of common resources and norms for community decision making. The importance of effective communication and sanctioning mechanisms in effective community governance has become clear from the use of the framework.

The spread of ideas, information, and experience in ever tightening webs of interaction describes the history of the world. The inventions of bureaucratic government (to enforce defense against competing groups); alphabetic writing (to communicate at distances greater than a village or metropolis through the use of symbols); and "portable, congregational, non-local religions"(to assuage the inequalities created by the development of more complex societies by offering the promise of a better life in the hereafter and a moral code for peoples more loosely connected than they would have been in smaller, isolated villages) resulted in the creation of metropolitan webs in the earliest civilizations in Southwest Asia and Egypt, China, and what has become India and Pakistan. Connections of separate webs by traders lead to innovation diffusion, albeit at a slower pace. Disease and economic connections also resulted from these inter-web connections. Later elaborations of these developments over millennia thickened the webs of communication and increased the velocity of information leading to the rapid diffusion of innovation: while agriculture was invented in several isolated places, the steam engine only had to be developed once. The current cosmopolitan web of cooperation and competition was accelerated by the exploitation of inventions like large ships and navigation systems, moveable type, the exploitation of energy from fossil fuels, the scientific method and its association with technology developments, and more recently, electronic communication. The complexity of society has increased along with social inequalities at the same time that cheap information technologies make those inequalities evident to all creating a “combustible mix.”

NASCAR drivers form and re-form into draft lines to take advantage of aerodynamic phenomena to gain an edge in competitions with other drivers who have basically equivalent automotive equipment. 'Draft partnerships' are necessary to get ahead; however, they must be abandoned strategically to win. Within a race, at high speeds, there is an ever-shifting pattern of cooperation and competition among rivals. This is a reflection of an important, desirable American trait: how to compete by doing a good job of cooperating. Essential to success in drafting are trust, acquired over time, and an effective communication support structure through networks of representatives (spotters). Complexity theory, social network analysis, and game theory are used to analyze the behaviors. The lessons are applied in other social domains.

The human being is not unique among the animals in having to apply limited time and energy to strategies in order to survive and reproduce. Yet modern economic theory avoids biological or psychological justifications for behavior by treating individual humans as black boxes with simple input and output. This reductionist view of economic problems neglects universal bioeconomic principles that underlie all survival enterprises. Chaos theory and modeling of non-linear dynamical systems show that economic systems display historicity: path dependency and sensitivity to past cultural and economic development. Corning lists these universal principles: that the survival problem is always contingent on the specific environment, that energy and access to information about energy are crucial to survival and reproduction, that organisms have limited time and energy to meet their needs, that competitive and cooperative strategies are both equally relevant aspects of adaptation, and that dramatic economic benefits can arise from the non-linear cooperative effects of synergies. An analytical framework under the “Interactional Paradigm” would begin with the development of explicit measures of human needs satisfaction and a reexamination of the relationship between our biological, motivational substrate and our learned and cultural behaviors.

Because sperm is cheap and eggs are costly and because both males and females can take genetic advantage by cheating on their partners or males can gain genetic advantage by abandoning offspring to be raised by others, mating behaviors in a wide range of species exhibit characteristics economists see in markets. Male songbirds share territory to mutual advantage through signals mediated by plumage color and cleaner-fish provide more thorough parasite-removing service to "customer" fish who come from far away (and are more likely to switch to other cleaners. The more general notion of biological markets grew from mating market theories with the recognition that mutualism and other partnerships were possible outside mating. Biological markets continue to differ in significant ways from the pure markets of economic theory because other biological agents do not have human cognitive capabilities, because the characteristics of individual traders are important in biology and not in economic markets where price and not plumage is the key signal, complete contracts are enforceable at no cost are assumed in economics and not possible in biological populations.

A good evolutionary theory of cooperation would account for important role of institutions and the large variation in institutions in different countries. Evolutionary theories address the origin of preferences issue that is missing from rational action explanations. Explanations that include influence of cultural evolution on decisions regarding cooperation have multiple payoffs. These models can begin to answer questions about the long time-scale process of human cooperation (the rise of capitalist economies of the past 500 years, the rise of complex societies and agriculture of the past 10 millennia). Culture and institutions are a form of inheritance, subject to a process of selection influenced by and simultaneously influencing gene selection, and in both processes the time to reach any equilibria runs into the scale of millennia. Evolutionary theories are always systemic, integrating all changes happens from the scope of the biological to the ecological and social. Rapid cultural change and large variation among groups occur "whenever multiple stable social equilibria exist, due to conformist social learning, symbolically marked boundaries, or moralistic enforcement of norms."

The decrease in punishment of those who failed to punish violators may have played a part in the sudden collapse of communism, and Granovetter noted that riots can have tipping points in which "a slight change in the willingness of a few people to act first can get the ball rolling." Axelrod defines norms thus: "A norm exists in a given social setting to the extent that individuals usually act in a certain way and are often punished when seen not to be acting in this way." Therefore, norms are a matter of degree, not all or nothing. "By linking vengefulness against nonpunishers with vengefulness against defectors, the metanorm provides a mechanism by which the norm against defection becomes self-policing." Reputation plays a role because defection is not only a means for a defector to harvest a payoff, but a signal that can be used be others: "a norm is likely to originate in a type of behavior that signals things about individuals that will lead others to reward them." The observation from norms-game trials that norms can sometimes establish themselves quickly led Axelrod to conclude that "there may be some useful cooperative norms that could be hurried along with relatively modest interventions."