I really wish you would have put a disclaimer on these posts the likes of:

One of the assumptions The Art of Strategy makes is that rational agents use causal decision theory. This is not actually true, but I'll be using their incorrect use of "rationality" in order to make you uncomfortable.

Anyway,

Nick successfully meta-games the game by transforming it from the Prisoner's Dilemma (where defection is rational) [...]

this is the problem with writing out your whole sequence before submitting even the first post. You make the later posts insufficiently responsive to feedback and make up poor excuses for not changing them.

Edit: Why yes, wedrifid, there was. Fixed.