Cooperative behavior and institutions

The persistent observation of cooperative behavior in situations where defecting would be individually preferable challenges the standard hypothesis of individual utility maximization. This has advanced search for alternative ways of understanding choice. Proposals dominantly include expanding the kind of arguments to be included into the utility function. The paper identifies some pertinent problems with these explanations. An alternative model based on the idea of plural rationality and institutions-as-rationality-context is developed. The model is confronted with data from existing experiments. Implications for public policy and ideas for further research are emphasized.