Now that I think about it, you are right that for PD, there has to be some one-on-one iteration too. I think my automatic mental model was that agents came tog

Now that I think about it, you are right that for PD, there has to be some one-on-one iteration too. I think my automatic mental model was that agents came together and played a few rounds with one partner, and then switch to some other partner. In this case you can afford to be nice in the first round, and then cut your losses. But even that strategy is only optimal if most of the rest of the community is nice in the first round too. If it is full of defectors, then you should defect in the first round too.