What strategy actually beats freeloaders?
In 1981, political scientist Robert Axelrod and evolutionary biologist William
Hamilton ran a computer tournament to find out. A wide range of strategies competed
in an iterated Prisoner’s Dilemma — a repeated game where each
player can cooperate or defect each round, with payoffs that make defection
tempting if you think the other side is going to cooperate. Axelrod and
Hamilton found that “cooperation based on reciprocity can get started
in an asocial world, can thrive while interacting with a wide range of other
strategies, and can resist invasion once fully established.” The winning
strategy was the simplest entry in the tournament.
It was called tit-for-tat. The rules: cooperate on the
first move, then do exactly what the other player did last round. If they
cooperated, cooperate. If they defected, defect. Then reset and go again.
What made it dominant was four properties working together:
Tit-for-tat in four words: nice, retaliatory, forgiving,
clear. It starts cooperatively, immediately punishes defection, resumes
cooperation once the other side does, and is simple enough that the other
player quickly understands the rules. The combination earns cooperation
without being exploitable.
Strategies that were too forgiving got exploited by defectors.
Strategies that were too retaliatory poisoned relationships with accidental
defectors. The best results came from a simple middle ground: cooperate first,
match behavior, and don’t hold grudges past one round.
Source: Robert Axelrod & William D. Hamilton, “The Evolution of Cooperation,” Science (1981).