I'm interested in the inconsistency of those who accept defection as the rational equilibrium in the one-shot PD, but find excuses to reject it in the finitely iterated known-horizon PD.

[...] What if neither party to the IPD thinks there's a realistic chance that the other party is stupid - if they're both superintelligences, say?

It's never worthwhile to cooperate in the one shot case, unless the two players' actions are linked in some Newcomb-esque way.

In the iterated case, if there's even a fairly small chance that the other player will try to establish cooperation, then it's worthwhile to cooperate on move 1. And since both players are superintelligences, surely they both realise that there is indeed a sufficiently high chance, since they're both likely to be thinking this. Is this line of reasoning really an "excuse"?

One more thing; could something like the following be made respectable?

1. The prior odds of the other guy defecting in round 1 are .999 2. But if he knows that I know fact #1, the odds become .999 x .999 3. But if he knows that I know facts #1 and #2, the odds become .999 x .999 x .999

Etc...

Or is this nonsense?