In considering how the evolution of cooperation could have begun, some social structure was found to be necessary. In particular, it was shown in chapter 3 that a population of meanies who always defect could not be invaded by a single individual using a nice strategy such as TIT FOR TAT. But if the invaders had even a small amount of social structure, things could be different. If they came in a cluster so that they had even a small percentage of their interactions with each other, then they could invade the population of meanies.

This chapter explores the consequences of additional forms of social structure. Four factors are examined which can give rise to interesting types of social structure: labels, reputation, regulation, and territoriality. A label is a fixed characteristic of a player, such as sex or skin color, which can be observed by the other player. It can give rise to stable forms of stereotyping and status hierarchies. The reputation of a player is malleable and comes into being when another player has information about the strategy that the first one has employed with other players. Reputations give rise to a variety of phenomena, including incentives to establish a reputation as a bully, and incentives to deter others from being bullies. Regulation is a relationship between a government and the governed. Governments cannot rule only through deterrence, but must instead achieve the voluntary compliance of the majority of the governed. Therefore regulation gives rise to the problems of just how stringent the rules and the enforcement procedures should be. Finally, territoriality occurs when players interact with their neighbors rather than with just anyone. It can give rise to fascinating patterns of behavior as strategies spread through a population.

Labels

People often relate to each other in ways that are influenced by observable features such as sex, age, skin color, and style of dress. These cues allow a player to begin an interaction with a stranger with an expectation that the stranger will behave like others who share these same observable characteristics. In principle, then, these characteristics can allow a player to know something useful about the other player’s strategy even before the interaction begins. This happens because the observed characteristics allow an individual to be labeled by others as a member of a group with similar characteristics. This labeling, in turn, allows the inferences about how that individual will behave.

The expectations associated with a given label need not be learned from direct personal experience. The expectations could also be formed by secondhand experience through the process of sharing of anecdotes. The interpretations given to the cues could even be formed through genetics and natural selection, as when a turtle is able to distinguish the sex of another turtle and respond accordingly.

A label can be defined as a fixed characteristic of a player that can be observed by other players when the interaction begins. When there are labels, a strategy can determine a choice based not only on the history of the interaction so far, but also upon the label assigned to the other player.