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Voting by Hands Promotes Institutionalised Monitoring in Indirect Reciprocity

Indirect reciprocity based on reputation is a leading mechanism driving human cooperation, where monitoring of behaviour and sharing reputation-related information are crucial. Because collecting information is costly, a tragedy of the commons can arise, with some individuals free-riding on information supplied by others. This can be overcome by organising monitors that aggregate information, supported by fees from their information users. We analyse a co-evolutionary model of individuals playing a social dilemma game and monitors watching them; monitors provide information and players vote for a more beneficial monitor. We find that (1) monitors that simply rate defection badly cannot stabilise cooperation---they have to overlook defection against ill-reputed players; (2) such overlooking monitors can stabilise cooperation if players vote for monitors rather than to change their own strategy; (3) STERN monitors, who rate cooperation with ill-reputed players badly, stabilise cooperation more easily than MILD monitors, who do not do so; (4) a STERN monitor wins if it competes with a MILD monitor; and (5) STERN monitors require a high level of surveillance and achieve only lower levels of cooperation, whereas MILD monitors achieve higher levels of cooperation with loose and thus lower cost monitoring.