An interpretation of the evolution of complexity in the Iterated Prisoner's Dilemma (IPD) is developed, based on Ashby's ``law of requisite variety''. It is demonstrated that the influence of noise on the evolutionary dynamics of this system is critically dependent on the locus of this noise. It is also argued that noise in such an evolving system is not merely, (or necessarily) a source of variation that must be adapted to, but, in certain circumstances, can facilitate the evolutionary exploration of increased areas of genotype space. This convergence between artificial life/game theory and cybernetics holds implications for how we understand the general relationship between environmental complexity and agent complexity, and for our understanding of the role of noise in evolving systems.
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