Why are people cooperative or altruistic? Tit-for-tat (reciprocation) dominates IPD tournaments. The answer seems to be that people cooperate, even sacrifice, because they are afraid of sanctions from their peers. This is called string reciprocation.
Create a world in which generations of turtles play iterated prisoner's dilemma (IPD) tournaments. At the end of a generation fit (winning) turtles mate with other fit turtles to produce the next generation.
Genetically, each turtle has two attributes it can pass on to its offspring:
cooperativeness = probability a turtle cooperates
vindictiveness = probability a turtle will punish a defector
When a turtle, t1, is updated, it plays one PD game with a random neighbor. If 1t decides to defect—this depends on his tendency to cooperate—he then "confesses" to all of its neighbors.
When a neighbor, t2, learns that t1 has defected, it may decide to punish t1—this depends on its vindictiveness or tendency to punish-- by deducting a penalty from t1's score. However, punishing wrong doers can be dangerous (as any cop will tell you). If t2 punishes t1, t2 must also deduct a penalty from its own score.
When turtles mate, the vindictiveness and cooperativeness of the offspring are simply the averages of their parent's vindictiveness and cooperativeness, respectively.