The n-player PD is also known as the public goods game, and is used to study cooperation as well.

Another meta-conclusion I would draw from our paper is that current game theory is insufficient to explain what we observe in real life, including politics, negotiation, and so on. It is folly to apply hyperrationality (strict economic modeling) to real human behavior, and part of the goal of our work is to stimulate more realistic models of what people do in these situations.

The PD is important because it's mostly the rational selfish actors who we need to worry about. Irrationally altruistic actors are rare, and irrational selfish actors tend to self-immolate or get arrested quickly. Many things go on during church socials that don't require any problem-solving on the part of game theorists; because widespread altruism is already a solution, just the hardest solution to actually get to.

>> "We know so much about game theory yet we can't apply it in politics" Oh, but we do apply this to politics, constantly; laws a re passed and enforced precisely to short-circuit a great many PDs; since if there's a large external penalty (even if infrequently applied) then short cuts may not pay. We tax everyone set amounts rather than ask nicely for contributions because that would set up a free-rider PD, etc, etc.

Of course, many political situations also exist where companies donate heavily and then ask for such penalties to be removed so they can sell worthless securities or not have their emissions monitored anymore. Democracy turns out to be pretty thoroughly corruptible, (but so do other forms of government.)

I think it's more that you have to understand game theory to follow it. Otherwise it's a descriptive language for understanding why things are.