Grouping promotes both partnership and rivalry with long memory in direct reciprocity.

Biological and social scientists have long been interested in understanding how to reconcile individual and collective interests in the iterated Prisoner's Dilemma. Many effective strategies have been proposed, and they are often categorized into one of two classes, 'partners' and 'rivals.' More recently, another class, 'friendly rivals,' has been identified in longer-memory strategy spaces. Friendly rivals qualify as both partners and rivals: They fully cooperate with themselves, like partners, but never allow their co-players to earn higher payoffs, like rivals. Although they have appealing theoretical properties, it is unclear whether they would emerge in an evolving population because most previous works focus on the memory-one strategy space, where no friendly rival strategy exists. To investigate this issue, we have conducted evolutionary simulations in well-mixed and group-structured populations and compared the evolutionary dynamics between memory-one and longer-memory strategy spaces. In a well-mixed population, the memory length does not make a major difference, and the key factors are the population size and the benefit of cooperation. Friendly rivals play a minor role because being a partner or a rival is often good enough in a given environment. It is in a group-structured population that memory length makes a stark difference: When longer-memory strategies are available, friendly rivals become dominant, and the cooperation level nearly reaches a maximum, even when the benefit of cooperation is so low that cooperation would not be achieved in a well-mixed population. This result highlights the important interaction between group structure and memory lengths that drive the evolution of cooperation.