  Dense cooperative networks are an essential element of social capital for a
prosperous society. These networks enable individuals to overcome collective
action dilemmas by enhancing trust. In many biological and social settings,
network structures evolve endogenously as agents exit relationships and build
new ones. However, the process by which evolutionary dynamics lead to
self-organization of dense cooperative networks has not been explored. Our
large group prisoner's dilemma experiments with exit and partner choice options
show that core-periphery segregation of cooperators and defectors drives the
emergence of cooperation. Cooperators' Quit-for-Tat and defectors' Roving
strategy lead to a highly asymmetric core and periphery structure. Densely
connected to each other, cooperators successfully isolate defectors and earn
larger payoffs than defectors. Our analysis of the topological characteristics
of evolving networks illuminates how social capital is generated.
