An excerpt from the Precipice Guide to Improvising Plays:

But why should improvisers actively support their fellow players? The spirit of altruism is fine in life, but why require actors to always apply it on stage? Isn't improvising hard enough without such a rule? After all, improvisers must create all their own dialog, in addition to developing their character, the setting for each scene, and the plot. Won't this change in focus away from self toward the other actors strain one's creativity? Why should actors be required to add details to others' ideas. Isn't that their responsibility?

The key to answering these questions lies in two facts, one about audiences and one about actors.

a. Audience psychology

Watching a play or a film takes work. Not the type of work most people get paid for. But work nonetheless. Because an audience must absorb a huge amount of information in a short time about the setting, the characters, their life histories, their occupations, their social status, their relationships with other characters, and their objectives. The audience expects to be rewarded for this work. Not with a paycheck. But with a powerful emotional payoff. Otherwise the audience feels cheated. Thus, all the details of the characters' lives that are portrayed in the play or film should contribute to the payoff. Conversely, audiences resent plays containing extraneous incidents and dialog that are not needed for a play's several climaxes. As a result, playwrights pare down the lives of the characters portrayed in a play to just those events and dialog that set up and illuminate the play's dramatic points. Thus, the play Hamlet contains no scenes or flashbacks about Hamlet's college days, and few details of his relationship with Horatio. They are not important to the plot, the themes, or the dramatic events of the play.

Of course, improvisers cannot revise their plays the way playwrights do to eliminate unnecessary dialog and incidents, because their first draft of a play or a scene is their final draft. So, they cannot be sure that every line of dialog and every action will contain dramatic significance. But improvisers have in their theatrical arsenal, a weapon that gives them a fighting chance to create lean plays with little extraneous material — the "yes and" rule. Because, by actively supporting all the dialog and actions of each character, the cast of an improvised play maximizes the likelihood that the events they depict on stage will provide the awaited emotional payoff.

Moreover, there is a corollary to the "yes and" rule, which if followed, guarantees that all incidents created in an improvised play advance the action and themes of the play: re-incorporate material from earlier in the play into scenes occurring later in the play. Playwrights and other writers use this trick all the time. In fact, this concept served as the basis for the structure of the multi-plot Seinfeld show, where each episode incorporated characters and objects from one plot line into other plot lines to achieve unexpected comic payoffs. Actors can use this technique — which is nothing more than a variation on the "yes and" rule — to improvise plays, since it requires only that the actor remember earlier incidents in the play and use them in some way later on. Thus, the "yes-and" rule is a powerful tool to compensate for the inability of improvisers to rewrite their material.

b. Actor psychology

Improvising is a group activity requiring intense cooperation between actors operating at their peak level of creativity. This is especially true when improvising a play because this task demands that actors integrate and simultaneously practice dozens of complex skills. Unless improvisers can achieve their peak performance consistently, there is no chance of creating excellent plays. Playwriting is too unforgiving a discipline.

Fortunately, psychologists have identified a factor important for achieving peak performance — a supportive and accepting atmosphere. Even more fortunately, improvisers have developed a method to create this environment on stage, every time they perform. It is the same tool used to maximize the likelihood of emotional payoffs in an improvised play. It is the "yes and" rule. Because, when an ensemble acknowledges, accepts, and supports all the dialog and actions that occur on stage, its members feel safe to take risks and perform their best work. And these positive feelings are not just generalized feelings of good will that build up over time. They are generated anew in each performance when actors support the choices of others.

It's traditional.