Good agreements make good friends

When starting a new collaborative endeavor, it pays to establish upfront how strongly your partner commits to the common goal and what compensation can be expected in case the collaboration is violated. Diverse examples in biological and social contexts have demonstrated the pervasiveness of making prior agreements on posterior compensations, suggesting that this behavior could have been shaped by natural selection. Here, we analyze the evolutionary relevance of such a commitment strategy and relate it to the costly punishment strategy, where no prior agreements are made. We show that when the cost of arranging a commitment deal lies within certain limits, substantial levels of cooperation can be achieved. Moreover, these levels are higher than that achieved by simple costly punishment, especially when one insists on sharing the arrangement cost. Not only do we show that good agreements make good friends, agreements based on shared costs result in even better outcomes.