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For cooperation to evolve via direct reciprocity, individuals must track their partners’ behavior to avoid exploitation. With increasing size of the interaction group, however, memory becomes error prone. To decrease memory effort, people could categorize partners into types, distinguishing cooperators and cheaters. We explored two ways in which people might preferentially track one partner type: remember cheaters or remember the rare type in the population. We assigned participants to one of three interaction groups which differed in the proportion of computer partners’ types (defectors rare, equal proportion, or cooperators rare). We extended research on both hypotheses in two ways. First, participants experienced their partners repeatedly by interacting in Prisoner’s Dilemma games. Second, we tested categorization of partners as cooperators or defectors in memory tests after a short and long retention interval (10 min and 1 week). Participants remembered rare partner types better than they remembered common ones at both retention intervals. We propose that the flexibility of responding to the environment suggests an ecologically rational memory strategy in social interactions.