This proposal is to investigate the biological evolution of cooperation by integrating ideas from the economic theory of the firm into evolutionary biology. Biologists have long puzzled about why animals join in social groups rather than act as selfish individuals, as would seem to be required by natural selection. Biologists have wondered what explains the size of social groups, how social groups are organized and what motivates participants to be honest with one another without cheating or freeloading. These questions have had counterparts in the economic theory of the firm, a subject that has flowered since the 1970’s. Economists have debated why people join with one another in firms rather than act as individual contractors, what determines the size of a firm, how firms are best organized, what incentives motivate workers and managers to work together honestly so that shirking is minimized. These issues correspond almost exactly to topics in the evolutionary biology of animal social groups. This project will explore the connections between the evolution of cooperative social behavior in biology and the economic theory of the firm resulting in academic publications likely including initiating a book, as well as presentations in international professional conferences.