Contract theory for the evolution of cooperation: The right incentives attract the right partners

Partner choice is a critical stage of many biological interactions, from mating to cooperation. When the quality of the potential partners is unknown, one way to choose is to rely on signaling: costly signals can reveal the quality of the sender and allow the receiver to choose. In some cases, however, signaling (or an active choice based on signals) is not possible, for example in the initiation of the symbiosis between the squid Euprymna scolopes and the bioluminescent bacterium Vibrio fischeri. How is partner choice possible in this and other similar cases? I show that in a game with asymmetric information without signaling, imposing a deliberate cost for establishing the interaction allows the non-informed individual to attract the right partner if the cost induces only high quality individuals to accept the interaction. Furthermore, imposing different costs and rewards may induce the informed individuals to screen themselves according to their types, and therefore allow the non-informed individual to establish an association with the correct partners in the absence of signaling. (C) 2010 Elsevier Ltd. All rights reserved.