Reputation effects drive the joint evolution of cooperation and social rewarding.

People routinely cooperate with each other, even when cooperation is costly. To further encourage such pro-social behaviors, recipients often respond by providing additional incentives, for example by offering rewards. Although such incentives facilitate cooperation, the question remains how these incentivizing behaviors themselves evolve, and whether they would always be used responsibly. Herein, we consider a simple model to systematically study the co-evolution of cooperation and different rewarding policies. In our model, both social and antisocial behaviors can be rewarded, but individuals gain a reputation for how they reward others. By characterizing the game's equilibria and by simulating evolutionary learning processes, we find that reputation effects systematically favor cooperation and social rewarding. While our baseline model applies to pairwise interactions in well-mixed populations, we obtain similar conclusions under assortment, or when individuals interact in larger groups. According to our model, rewards are most effective when they sway others to cooperate. This view is consistent with empirical observations suggesting that people reward others to ultimately benefit themselves.