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This paper investigates the emergence of cooperation in a heterogeneous population. The population is divided into two cultural groups. Agents in the population are randomly matched in pairs to engage in a prisoner dilemma. The matching process is assortative, that is, cooperators are more likely to be matched with cooperators, defectors are more likely to be matched with defectors. When two agents of different cultures are matched, they suffer a cost due to their cultural differences. We call such a cost cultural aversion. We find that when cultural aversion is sufficiently strong, perfect correlation between culture and behavior emerges: all agents from one cultural group cooperate, while all agents from the other cultural group defect.

The Interplay of Cultural Aversion and Assortativity for the Emergence of Cooperation