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In Reservoir Dogs, each of the crooks are given a colour based pseudonym, but aside from enabling a funny argument when the names are being handed out, I don't really see the point.

The idea given is that of they don't know each other's real names, if any one of them is collared, they won't be able to identify the others when questioned.

But they all know Joe and Eddie, the ring leaders, who the police would surely be most interested in, so what's the point? Is Joe just that considerate of his employees that even if he gets caught he doesn't want them to rat each other out?

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    Out-of-universe it's a reference to The Taking of Pelham 1-2-3. Not that this would change too much about your specific question. – Napoleon Wilson Feb 27 at 16:33
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It's mentioned explicitly by Joe. (Emphasis mine):

With the exception of Eddie and myself, who you already know, you'll be using aliases. Under no circumstances are you to tell one another your real name or anything else about yourself. That includes where you're from, your wife's name, where you might've done time, about a bank in St. Petersburg you might've robbed. You guys don't say shit about who you are, where you been or what you've done. Only thing you guys can talk about is what you're going to do. This way the only ones who know who the members of the team are are Eddie and myself. And that's the way I like it. Because in the unlikely event of one of you getting apprehended by the cops, not that I expect that to happen - it most definitely should not happen - it hasn't happened, you don't have anything to deal with. You don't know any names. You know my name, you know Eddie's name. That I don't care about. You gotta prove it. I ain't worried. Besides, this way you gotta trust me. I like that. I set this up and picked the men I wanted for it. None of you came to me, I approached all of you. I know you. I know your work, I know your reputation...

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