We all use game theory as unconsciously as sticklebacks or bats. A human society is a group interacting repeatedly. Some interactions pose choices between self and group interest. How often mutual cooperation occurs is a measure of how effectively the society is functioning.
The paramount importance of civilization in human history rests with its role in promoting cooperation. With the discovery of agriculture, people formed permanent settlements. Once people became rooted to cultivated plots of earth, society changed. For the first time, People had neighbors, fellow beings that they would have dealings with again and again. A person who cheats his neighbor could not expect cooperation in the future. A person who cheated all his neighbors would be an outcast. With corps in the ground or an urban business with a stock of good will, it was no longer so easy to pick up and move on. For most people, most of the time, it was easier to cooperate.
Many of the trappings of civilization promote cooperation. Inventions such as names, language, credit card, license plates, and ID cards help connect a person with his past behavior. That permits the use of conditional strategies. Most laws proscribe defection of various kinds. In their 1957 book, Luce and Raiffa observed that “some hold the view that one essential role of government is to declare that the rules of certain social ‘games; must be changed whenever it is inherent in the game situation that the players, in pursuing their own ends, will be forced into a socially undesirable position.
Human history is not one of ever-increasing cooperation, though. Game theory may help to understand that, too. TIT FOR TAT is not the only conditional strategy that is evolutionarily stable or nearly so. Once entrenched, other strategies can be highly stable.
Game theorists Steve Rytina and David L. Morgan investigated the role of labels. A label is any category that can be used to distinguish players. In human societies, it may be gender, race, social class, nationality, club membership, union membership, or other attributes.
Imagine a society divided into two groups, the blues and the reds. Nearly everyone in the society follows a strategy that can be called “DISCRIMINATORY TIT FOR TAT” (DTFT). This strategy is just like TIT FOR TAT except when dealing with someone of a different color group. Then you always defect.
When two reds interact for the first time, each cooperates. When two blues with no history interact, both cooperate. But when a red and blue interact, each defects (“because you can’t trust those guys”).
Rytina and Morgan demonstrated that this arrangement is stable. An individual who tries to play regular, color-blind TIT FOR TAT is worse off than the one who conforms. Suppose a red and blue interact for the first time, and the blue contemplates cooperating (as in regular TIT FOR TAT). The red player, however, is almost certainly playing DTFT and will defect. The blue player will get the sucker payoff and do less well than a conformist playing DTFT.
This does not mean that DTFT is more successful than TIT FOR TAT would be if everyone played TIT FOR TAT. It’s not. Every time players of different colors interact they end up with the punishment rather than the reward. But DTFT is stable once entrenched because it punishes individual efforts to establish TIT FOR TAT.
The label that is in the minority is hurt more by DTFT than the majority. If reds are greatly in the majority, then most of a red player’s interaction will be with other reds. In that case, DTFT is not much different from TIT FOR TAT. Only in a few cases will an interaction be with a blue. But blues, being in the minority, will interact frequently with reds, and in each case will get the punishment payoff. In the limiting case of an arbitrarily small minority, its members will almost always received the punishment payoff, while the majority almost always receives the reward.
This provides a game-theoretic rationale of separatist movements. Such diverse phenomena as “Chinatowns” and ghettos, India’s partition into Moslem and Hindu states, the Pilgrims’ founding of the Massachusetts Bay Colony, the separation of Marcus Garvey and Black Muslims, and the Mormons’ founding of Utah all have or had the effect of limiting a minority’s interaction with outsiders distrustful of them.