UC Riverside

Theoretically informed by recent computational and mathematical studies highlighting the importance of signals and networks in the evolution of cooperation, the present research undertakes simulation experiments to investigate socio-psychological bases and structural foundations of cooperation as institutional order. Simulated societies consist of three groups of agents with markers and tolerance: altruists, defectors, and parochial egoists. They simultaneously play a one-shot Prisoner's Dilemma game with neighbors by helping tolerably similar ones and by declining to help otherwise. They either imitate markers and tolerance of more successful neighbors or switch partners by breaking the old ones to out-group neighbors after creating new ties to others if both sides accept each other as in-group.

Our study furthers understanding of the dynamics of cooperation in human societies facing the Prisoner's Dilemma: altruists alone are less likely to defeat defectors regardless of network topology as cooperation becomes costly and the average number of interaction partners increases; under these conditions, parochialism is necessary for the institutionalization of cooperation; agents adapt themselves to increasingly homogenized environments by learning intolerance; emergent cooperative societies in the presence of imitation errors are vulnerable to free-riders with tolerably similar markers; either persistent cultural diversity or highly clustered networks with long paths stabilize cooperation; and even if markers are completely mutable, society-wide and robust cooperation is achievable with increased diversity as hierarchical networks of cultural groups self-organize where less tolerant agents in the periphery shield more tolerant ones in the core from emerging free-riders.

The current study provides sociologists with theoretical and methodological resources for a game-theoretical approach to institutional analysis. Socio-psychological research maintains that group identity enhances cooperation either because human subjects in pre-assigned groups maximize group-level rewards or when they expect continuing benefits from in-group favoritism. We rather demonstrate the evolution of cooperation without expectations of in-group reciprocity. Cultural groups emerge as arbitrary markers become salient together with stratification driven by parochial interactions. Our study also contributes to understanding of how stable markets can evolve out of repeated plays of a social dilemma game among parochial agents locally embedded in on-going exchange networks with limited knowledge about costs and opportunities.