Excellent discussion! I am a bit too foggy tonight to comment on the many fine points, but I am leaving this bookmark to remind myself to come back and reread the entry. In particular the problem of "misunderstanding of some sort, for the players to become locked in a perpetual cycle of mutual defection."
Also, have you read _Non Zero: The Logic of Human Destiny_ , Robert Wright? I have it, but haven't read it yet. He does devote some a small discussion to prisoner's dilemma. I'll see if there is anything not brought out in your article. But, I must say, I don't think he can be any more direct in explaining it.
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