David Gauthier (1986).  [Excerpts from his] Morals by Agreement.

ORIENTING NOTES WHILE YOU DO THE READING

• The social contract method:  Hobbes, Locke, Rousseau, Kant, Rawls, Nozick
  • Basic issue:  why & how cooperate, and esp. how to justify disciplining defectors / free riders.
  • Feminist critique later, but it concerns the historical situatedness of the images of the contracting parties.
• Hobbes's Leviathan as one solution:
  • Attempts to derive contract from rationality.
  • The problem for Hobbes:  why not defect if one is strong enough?
• The Prisoner's Dilemma as the paradigmatic example of the problem of social cooperation:

• The problem:  individual utility maximization leads the first player to be better off by confessing, regardless of the second player's choice.  But this is equally true for both players, so both of them confessing leads to a heavy sentence for both, much less than the optimal result.
• Gauthier casts the problem as one of "constrained maximization", where one assumes that both players recognize their adoption of the same strategy.
• Note also Gauthier's use of the "Lockean proviso" that failure to cooperate should not make others worse off, even if one does not assist them.
• Gauthier proposes that the dividends of cooperation be divided in proportion to each person's relative "stake" in cooperation, that is, the amount that s/he would benefit from cooperation as opposed to non-cooperation.  In the example above, both players can guarantee themselves a payoff of (negative) 5 even without cooperation;  cooperation yields each of them a payoff of (negative) 2 years, so each has an equal stake in cooperation:  3 years' shortening of their sentences.*  [*I am puzzled why their shares should not be in inverse proportion to their stake in cooperation.  After all, if cooperation makes little difference to me, then I have a bargaining advantage vis-a-vis whoever has a huge stake in cooperation.]
• Gauthier allows for the possibility that some people are betrayers / free riders;  towards them, assuming we can identify them, we have no obligations.  Mathematical calculations show that cooperation is rational only when one has a certain ability to differentiate cooperators from betrayers.  (He also introduces the consideration of how likely it is for someone to be a cooperator.)  If one can't tell the difference between cooperators and betrayers, and/or if one is in a situation where betrayers are thick on the ground, then it becomes irrational to cooperate.
• Note that Gauthier's argument gives no obligation to anyone to foster a more cooperative society.