this setup as a simplified version of the Prisoner’s Dilemma that we explored in chapter 0. Cooperation means paying a cost for the other person to receive a benefit. Defection means doing nothing. If you think of one person as the donor and the other as the recipient, then it adds up to half of that problem, a demi Dilemma.
As we saw in the case of the Prisoner’s Dilemma, it is rational to defect. But only in a single encounter. If our players see each other again and again, cooperation can emerge because rational players must weigh the benefit of exploiting the other player in the first round against the cost of forfeiting collaboration in future rounds. But, of course, repeated encounters between the same two players leads to direct reciprocity. I now wanted to study the evolution of cooperation in a more general, indirect setting.
I arranged the game so that each player can take part in many rounds, but typically not with the same partner twice. Thus a defector—someone who does nothing to help—could not be held to account by an earlier victim. But defection can be detected nonetheless, as a result of players building up a reputation: a player’s reputation score (Karl and I called it “image” in our paper) is 0 at birth and rises whenever that player helps others. Equally, it falls whenever the player withholds help. This is an important ingredient of the game. It meant that we did not divide our players up into goodies or baddies. Instead, we graded the image of each player so it could be more nuanced and change as the game evolved.
There were also unconditional cooperators and unbending defectors. I built one more feature into the model, to add a touch more realism. Just as only a certain group of people are privy to gossip, so the outcome of any given encounter between players is only revealed to a subset of people in the population. As a result of this, different people hold different views about the reputation of the same person.
Karl and I found that if the cost-to-benefit ratio of cooperation is sufficiently low, and the amount of information about the co-player’s past sufficiently high, cooperation based on discrimination—favoring good reputations—can emerge. Instead of relying exclusively on my direct experience with someone (as is the case for direct reciprocity), I can now also benefit from the experience of others. Now my behavior toward you not only depends on what you have done to me, but also on what you have done to others.
The bottom line of these evolving populations was the following: if there is enough transfer of information about who did what to whom from person to person, then natural selection favors strategies that base their decision to cooperate (or defect) on the reputation of the recipient. If good reputations spread quickly enough, they can increase the chances of cooperation taking hold in a society. And, as one would expect, Bad Samaritans with a poor reputation receive less help.
We were not the first to argue that reputation is possibly an important factor for altruistic behavior. A form of the concept had been articulated—in a verbal outline, rather than mathematically—in a book by Richard Alexander at the University of Michigan, an expert on crickets, katydids, and cicadas. It was Alexander who, in The Biology of Moral Systems (1987), had first coined the term “indirect reciprocity.” Alexander had posed tough questions such as, What is moral? or How do we start to crystallize our ideas about what is good and bad? He argued that the answer lay in reputation. We are always scanning the impressions left by others and are more likely to give to somebody who has a good reputation, someone who has in her or his past given help to others—not necessarily to me, though, but just to somebody. Indirect reciprocity “involves reputation and status, and results in everyone in the group continually being assessed and reassessed.” This, he said, plays an essential role in human societies.
The idea appears in the work of economist and philosopher Robert Sugden of the University of East Anglia. He put forward the concept of “standing” in The Economics of Rights, Co-Operation, and Welfare (1986). The idea goes like this: If you defect against somebody who is in good standing, you move into bad standing. But if you defect against somebody who is in bad standing, you remain in good standing. A mathematical depiction of social norms had also been explored by the Japanese economist Michihiro Kandori. The fact that our new theory of indirect reciprocity had reputable forerunners gave it further credibility.
Karl also had plenty of anecdotes to underline why indirect reciprocity is just as relevant to everyday life as the direct version of reciprocity. He pointed out that the Rothschild family had protected the investments of their English clients during the Napoleonic Wars. They were under intense pressure to give them up, but they kept the interests of their English clients at heart. Afterward, of course, the Rothschild family became extraordinarily rich. Their fortune was a direct result of the power of indirect reciprocity: because they had behaved impeccably, everybody now knew that they could be trusted.
Then there was the story of the American baseball player Yogi Berra, who was famous for his pithy comments and witticisms known as Yogi-isms. One of them was a perfect summary of indirect reciprocity: “Always go to other people’s funerals, otherwise they won’t come to yours.” Berra was counting on the fact that his acts of kindness would not be returned by the recipients, but by third parties who were moved by his public mourning.
The idea is also wonderfully summarized in musical form by Tom Lehrer, the American singer-songwriter, satirist, pianist, and mathematician. In “Be Prepared,” Lehrer’s spiky salute to the Boy Scouts, he sings: “Be careful not to do / Your good deeds when there’s no one watching you.” German speakers even have a saying with the same gist, Milinski notes: Tue Gutes und rede darüber. (“Do good and talk about it.”) The converse was of course true too. This may all sound obvious. But without a mathematical model, we would have no quantitative understanding of how this mechanism really works. Nor would we be able to reveal the many subtleties of indirect reciprocity. The time was ripe to pin down the idea.
When, for example, Karl and I made the simulation more realistic and allowed for mutations, or mistakes in an evolving population of players, then we saw cooperation and defection wax and wane over time, as those with a good reputation are actually undermined by indiscriminate altruists who help anyone, no matter how well or badly the latter have behaved in the past. Then, free riders—unconditional defectors—invade until discriminating cooperators cycle back in. Given my earlier work on the Prisoner’s Dilemma, I was not surprised by this. But anyone unfamiliar with the field would have found it striking how the degree of cooperation always rides a seesaw of cycles.
Importantly, we found that natural selection favored strategies, called Discriminating strategies, that pay attention to the reputations of others. These strategies prefer to interact with people who have a good reputation. Thus natural selection (acting in the framework of indirect reciprocity) promotes social intelligence: observe others, learn about them, understand who did what to whom and why.
Karl and I also made an intriguing discovery that underlined how, when people act on their convictions, it can come at a cost. Refusing help to a free rider or other defector lowers the score of discriminating players so that, even though they may have acted for good reason, they might come over as Bad Samaritans. A colleague at work lets you down badly and you snap at her. From the perspective of fellow workers in a calm open plan office, your angry outburst makes you appear out of control. Or you may decide not to help a tramp because he whispered an insult at you. To an onlooker on the other side of the road, however, it looks like you have turned your back on a poor and deserving vagrant. This also diminishes your likelihood of being helped in turn.
The bottom line of our theory was that an act of altruism will only evolve when the shadow of the future—that is, the expectation of coming gains—exceeds the cost. This idea could in turn be summed up by a simple mathematical relationship. The evolution (emergence) of cooperation can occur if the cost-to-benefit ratio is exceeded by the probability of knowing someone’s reputation, if you like. Karl and I submitted our work to the prestigious journal Nature. The paper was accepted without much bother and was published in 1998. In its wake came many more papers on the subject
