"In the standard framework of indirect reciprocity, there are randomly chosen pairwise encounters between members of a population; the same two individuals need not meet again. One individual acts as donor, the other as recipient. The donor can decide whether or not to cooperate. The interaction is observed by a subset of the population who might inform others. Reputation allows evolution of cooperation by indirect reciprocity.
Natural selection favors strategies that base the decision to help on the reputation of the recipient: studies show that people who are more helpful are more likely to receive help." In many situations cooperation is favoured and it even benefits an individual to forgive an occasional defection but cooperative societies are always unstable because mutants inclined to defect can upset any balance. The calculations of indirect reciprocity are complicated, but again a simple rule has emerged. Indirect reciprocity can only promote cooperation if the probability, q, of knowing someone's reputation exceeds the cost-to-benefit ratio of the altruistic act: :
q > c / b One important problem with this explanation is that individuals may be able to evolve the capacity to obscure their reputation, reducing the probability, q, that it will be known. Individual acts of indirect reciprocity may be classified as "upstream" or "downstream": •
Upstream reciprocity occurs when an act of altruism causes the recipient to perform a later act of altruism in the benefit of a third party. In other words: A helps B, which then motivates B to help C. •
Downstream reciprocity occurs when the performer of an act of altruism is more likely to be the recipient of a later act of altruism. In other words: A helps B, making it more likely that C will later help A. ==Network reciprocity==