Altruists and envious people who meet in contests are symbionts. They do better than a population of narrowly rational individuals. If there are only altruists and envious individuals, a particular mixture of altruists and envious individuals is evolutionarily stable.

Why do contests exist in settings where negotiation provides a costless alternative? I assess a new explanation: parties may be overconfident about their ability or optimistic about their chances of winning. For both parties in a contest, this hubris: (i) reduces the incentive to exit the...