Abstract
This paper studies how the cooperation in the one-shot Prisoner's Dilemma (PD) is sustained under social pressures. We study how the payoff structure of the PD affects cooperation considering image-conscious preferences, and state the conditions on image-conscious preferences that are consistent with the experimental evidence of the one-shot PD. We show that social emotions stemming from social pressures can develop strategic relationships such as strategic substitutes or complements. Following the experimental evidence, we theoretically find that decision-makers are impurely selfish; they act selfishly under the low level of social pressures. Moreover, we discuss the relationship between image-conscious preferences and intrinsic reciprocity. The relationship implies that image concerns provide a foundation for reciprocity.
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