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Vladimir_Nesov comments on Towards a New Decision Theory - Less Wrong
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No, I'm assuming that the AIs don't have enough information or computational power to predict the human players' choices. Think if a human-created AI were to meet a paperclipper that was designed by a long-lost alien race. Wouldn't you program the human AI to play defect against the paperclipper, assuming that there is no way for the AIs to prove their source codes to each other? The two AIs ought to think that they are both using the same decision theory (assuming there is just one obviously correct theory that they would both converge to). But that theory can't be TDT, because if it were TDT, then the human AI would play cooperate, which you would have overridden if you knew was going to happen.
Let me know if that still doesn't make sense.
This problem statement oversimplifies the content of information available to each player about the other player. Depending on what the players know, either course of action could be preferable. The challenge of a good decision theory is to formally describe what these conditions are.