Cooperation during cultural group formation promotes trust towards members of out-groups.

People often cooperate with members of their own group, and discriminate against members of other groups. Previous research establishes that cultural groups can form endogenously, and that these groups demonstrate in-group favouritism. Given the presence of cultural groups, the previous literature argues that cultural evolution selects for groups that exhibit parochial altruism. The source of initial variation in these traits, however, remains uninformed. We show here that a group's economic production environment may substantially influence parochial tendencies, with groups formed around more cooperative production (CP) displaying less parochialism than groups formed around more independent production (IP) processes. Participants randomized into CP and IP production tasks formed cultural groups, and subsequently played hidden-action trust games with in-group and out-group trustees. We found CP to be associated with significantly greater sharing and exchanging behaviours than IP. In trust games, significant parochial altruism (in-group favouritism combined with out-group discrimination) was displayed by members of IP groups. By contrast, members of CP groups did not engage in either in-group favouritism or out-group discrimination. Further, we found the absence of out-group discrimination in CP to persist even following 'betrayal'. Finally, belief data suggest that members of CP are not more intrinsically generous than IP members, but rather more likely to believe that out-group trustees will positively reciprocate. Our results have important implications for anyone interested in building cooperative teams, and shed new light on connections between culture and cooperation.