Much human cooperation is based on some form of reciprocity --- the contingent exchange of benefits. For reciprocal altruism to evolve and be stable, cooperators must be able to exclude cheaters and cooperate only with those likely to reciprocate. However, the informational problem of distinguishing between cheaters and cooperators presents a challenging problem for a social agent. This dissertation investigates the proposal that human reciprocity is based not on the amount of benefits received, but on social valuation ---

the willingness to trade off one's own welfare for the sake of another's welfare. The human mind contains mechanisms that regulate one's valuation of the welfare of others, and mechanisms to estimate the extent to which others value one's own welfare. Because valuation predicts the delivery of benefits, the more another individual values my welfare, the more valuable he/she is to me. The process of calibrating social valuation is mediated in part by emotions: gratitude in response to cues of high valuation by others and anger in response to low valuation. I test the predictions of this model, and show the following results. (1) When subjects are paired up with each other and given tradeoff decisions, subjects reciprocate each others' willingness to trade off money for their partner. (2) Subjects' respond not to the amount of benefits they receive, but to their partner's willingness to sacrifice their own benefits for the subject.

(3) Anger and gratitude mediate subjects' responses to cues of valuation in theoretically predicted ways. (4) People are more grateful for a benefit, and more willing to reciprocate, when it is targeted at benefiting them specifically as an individual than when it is not so specifically targeted. (5) Cross culturally, people share common intuitions about what causes anger and what arguments assuage anger, and these are based on cues of social valuation. These results show that the human mind contains mechanisms that are acutely sensitive to cues indicating the weight that other individuals place on one's welfare, using these cues to regulate one's own valuation of the welfare of other individuals.