Nonsense. Hunter A kills hunter B, takes his wives, his meat, and his cave and lives in it happily thereafter.
"Overall" means "Combining the utility-analog of both parties", not "More utility-analog for a given party". With only one hunter, there are fewer kills/less meat overall, at the least.
Nope, I strongly disagree. To take a trivial example, Alice doesn't steal Bob's car because she thinks she'll be caught and sent to prison. Alice is NOT "cooperating" with Bob, she is reacting to incentives (in this case, threat of imprisonment) which have nothing to do with the prisoner's dilemma.
The incentives are the product of breaking the prisoner's dilemma - the "government altered the payoff matrix" and all that. Etiquette, ethics, and law are all increasing levels of rules, and punishment for those rules, whose core purpose is to alter payoffs for defection; from as subtle as the placement of utensils at a dinner table to prohibit subtle threats to other guests, and less desirable seat placements as punishments for not living up to standards of etiquette, to shooting somebody for escalating a police situation one time too many in an attempt to escape punishment.
Combining the utility-analog of both parties
I am not a utilitarian. I don't understand how are you going to combine the utils of both parties.
With one hunter less, there are fewer kills but fewer mouths to feed as well.
The incentives are the product of breaking the prisoner's dilemma
If it's broken, it's not a prisoner's dilemma situation any more. If you want to argue that it exists as a counterfactual I'll agree and point out that a great variety of things (including ravenous pink unicorns with piranha teeth) exist as a counterfactual.
I previously wrote a post hypothesizing that inter-group conflict is more common when most humans belong to readily identifiable, discrete factions.
This seems relevant to the recent human gene editing advance. Full human gene editing capability probably won't come soon, but this got me thinking anyway. Consider the following two scenarios:
1. Designer babies become socially acceptable and widespread some time in the near future. Because our knowledge of the human genome is still maturing, they initially aren't that much different than regular humans. As our knowledge matures, they get better and better. Fortunately, there's a large population of "semi-enhanced" humans from the early days of designer babies to keep the peace between the "fully enhanced" and "not at all enhanced" factions.
2. Designer babies are considered socially unacceptable in many parts of the world. Meanwhile, the technology needed to produce them continues to advance. At a certain point people start having them anyway. By this point the technology has advanced to the point where designer babies clearly outclass regular babies at everything, and there's a schism between "fully enhanced" and "not at all enhanced" humans.
Of course, there's another scenario where designer babies just never become widespread. But that seems like an unstable equilibrium given the 100+ sovereign countries in the world, each with their own set of laws, and the desire of parents everywhere to give birth to the best kids possible.
We already see tons of drama related to the current inequalities between individuals, especially inequality that's allegedly genetic in origin. Designer babies might shape up to be the greatest internet flame war of this century. This flame war could spill over in to real world violence. But since one of the parties has not arrived to the flame war yet, maybe we can prepare.
One way to prepare might be differential technological development. In particular, maybe it's possible to decrease the cost of gene editing/selection technologies while retarding advances in our knowledge of which genes contribute to intelligence. This could allow designer baby technology to become socially acceptable and widespread before "fully enhanced" humans were possible. Just as with emulations, a slow societal transition seems preferable to a fast one.
Other ideas (edit: speculative!): extend the benefits of designer babies to everyone for free regardless of their social class. Push for mandatory birth control technology so unwanted and therefore unenhanced babies are no longer a thing. (Imagine how lousy it would be to be born as an unwanted child in a world where everyone was enhanced except you.) Require designer babies to possess genes for compassion, benevolence, and reflectiveness by law, and try to discover those genes before we discover genes for intelligence. (Edit: leaning towards reflectiveness being the most important of these.) (Researching the genetic basis of psychopathy to prevent enhanced psychopaths also seems like a good idea... although I guess this would also create the knowledge necessary to deliberately create psychopaths?) Regulate the modification of genes like height if game theory suggests allowing arbitrary modifications to them would be a bad idea.
I don't know very much about the details of these technologies, and I'm open to radically revising my views if I'm missing something important. Please tell me if there's anything I got wrong in the comments.