Gradual reputation dynamics evolve and sustain cooperation in indirect reciprocity

Humans have achieved widespread cooperation, largely sustained by mechanisms such as indirect reciprocity, which relies on reputation and social norms. People are highly motivated to maintain a good reputation, and social norms play a critical role in reputation systems by defining acceptable behavior, helping prevent exploitation by free-riders. However, there is a gap between theory and experiment in handling reputation information, with experiments often failing to capture the complexity that theoretical models propose. Here, we address two key issues: what kind of information is needed to define reputation as a social norm and the appropriate level of granularity required for reputation information to function effectively. This paper combines scenario-based experiments and evolutionary game theory to investigate the social norms individuals adopt in real-world settings, aiming to uncover the stability of these norms. Our results show that reputations should be categorized into three levels good, neutral, and bad. Results suggest gradual reputation dynamics that increase and decrease gradually due to cooperation or defection. However, a person's reputation remains unchanged only when they defect against a bad reputation. Our experimental and theoretical results support critical insights into the dynamics of reputation and social norms within indirect reciprocity, challenging traditional binary reputational evaluations. The gradual nature of reputation updating and the use of nuanced evaluations provide a more realistic model of reputation dynamics.