Ingroup favoritism and intergroup cooperation under indirect reciprocity based on group reputation

TL;DR

This paper models indirect reciprocity in structured populations, revealing conditions under which ingroup favoritism or full cooperation are stable, and suggests ways to promote broader cooperation by altering social norms.

Contribution

It introduces a model incorporating group reputation approximation to explain ingroup favoritism and full cooperation, highlighting their stability under different social norms.

Findings

Ingroup favoritism and full cooperation are stable under different social norms.

Consistent use of social norms for all interactions promotes full cooperation.

The mechanism is distinct from group selection and suggests methods to reduce ingroup bias.

Abstract

Indirect reciprocity in which players cooperate with unacquainted other players having good reputations is a mechanism for cooperation in relatively large populations subjected to social dilemma situations. When the population has group structure, as is often found in social networks, players in experiments are considered to show behavior that deviates from existing theoretical models of indirect reciprocity. First, players often show ingroup favoritism (i.e., cooperation only within the group) rather than full cooperation (i.e., cooperation within and across groups), even though the latter is Pareto efficient. Second, in general, humans approximate outgroup members' personal characteristics, presumably including the reputation used for indirect reciprocity, by a single value attached to the group. Humans use such a stereotypic approximation, a phenomenon known as outgroup homogeneity in social psychology. I propose a model of indirect reciprocity in populations with group structure to examine the possibility of ingroup favoritism and full cooperation. In accordance with outgroup homogeneity, I assume that players approximate outgroup members' personal reputations by a single reputation value attached to the group. I show that ingroup favoritism and full cooperation are stable under different social norms (i.e., rules for assigning reputations) such that they do not coexist in a single model. If players are forced to consistently use the same social norm for assessing different types of interactions (i.e., ingroup versus outgroup interactions), only full cooperation survives. The discovered mechanism is distinct from any form of group selection. The results also suggest potential methods for reducing ingroup bias to shift the equilibrium from ingroup favoritism to full cooperation.