When individuals interact, their phenotypes may be affected by genes in their social partners, a phenomenon known as Indirect Genetic Effects (IGEs). In aquaculture species and some plants, competition not only affects trait levels of individuals, but also inflates variation of trait values among individuals. Variability of trait values has been studied as a quantitative trait in itself, and is often referred to as inherited variability. Although the observed phenotypic relationship between competition and variability suggests an underlying genetic relationship, models of IGE and inherited variability do not allow for such relationship. Models of trait levels show IGEs may considerably change heritable variation in trait values. Currently, we lack the tools to investigate whether this result extends to inherited variability. Here we present a model that integrates IGEs and inherited variability. In this model, the target phenotype, say growth rate, is a function of genetic and environmental effects of the focal individual and of the difference in trait values between the social partner and the focal individual, multiplied by a regression coefficient. The regression coefficient is a genetic trait which is measure of cooperation; a negative value indicates competition, a positive value cooperation, and an increasing value due to selection indicates the evolution of cooperation. Our simulations show that the model results in increased variability of body weight with increase of competition. When competition decreases, variability becomes significantly smaller. Our findings suggest we may have been overlooking an entire level of genetic variation in variability, the one due to IGEs.