Emergence of specialized third-party enforcement.

ABSTRACT

The question of how cooperation evolves and is maintained among nonkin is central to the biological, social, and behavioral sciences. Previous research has focused on explaining how cooperation in social dilemmas can be maintained by direct and indirect reciprocity among the participants of the social dilemma. However, in complex human societies, both modern and ancient, cooperation is frequently maintained by means of specialized third-party enforcement. We provide an evolutionary-game-theoretic model that explains how specialized third-party enforcement of cooperation (specialized reciprocity) can emerge. A population consists of producers and enforcers. First, producers engage in a joint undertaking represented by a prisoner's dilemma. They are paired randomly and receive no information about their partner's history, which precludes direct and indirect reciprocity. Then, enforcers tax producers and may punish their clients. Finally, the enforcers are randomly paired and may try to grab resources from each other. In order to sustain producer cooperation, enforcers must punish defecting producers, but punishing is costly to enforcers. We show that the threat of potential intraenforcer conflict can incentivize enforcers to engage in costly punishment of producers, provided they are sufficiently informed to maintain a reputation system. That is, the "guards" are guarded by the guards themselves. We demonstrate the key mechanisms analytically and corroborate our results with numerical simulations.