It's amazing how good humans are at this sort of thing, by instinct. I'm reading the book Hierarchy in the Forrest, which is about tribal bands of humans up to 100k years ago. Without law and social structure, they basically solved all of their social equality problems by game theory. And depending on when precisely you think they evolved this social dynamic, they may have had hundreds of thousands of years to perfect it before we became hierarchical again.
http://www.amazon.com/Hierarchy-Forest-Evolution-Egalitarian-Behavior/dp/0674006917
If you look at rationality on a spectrum, this type of game theory isn't on the most enlightened/sophisticated form of it. Thugs, bullies, despots and drama queens are very good at this sort of manipulation. Rather it's basically the most primitive instinctive part of human reasoning.
However, that's not to say it doesn't work. The original post's description of not wanting to look yourself in the mirror afterwards is very apt.
I find the article very interesting, but have trouble following the math. Maybe someone here better at math can help. I do have some understanding of linear algebra, and I've tried to check it with a spreadsheet:
I don't know how to convert that into a V with no negative numbers. Some of the co-efficients are positive and some negative, so you can't just scale it. Their formula for s_y correctly returns 2, but it's unclear if that corresponds to a real world equilibrium.
Are these fatal problems? Not sure yet. Their overall conclusion meets with my intuition. They're just saying that if one player only tries to maximize his own score, while the other player is strategic (in terms of denying the first player a higher score), then the second player is going to win in the long term. Except they call the first player "evolutionary," and the second player "sentient."
And two, there's no point being too "smart" (looking back too many moves) when your opponent is "dumb" (looking back only 1 move).
You could say both of these things about the current bargaining position of the US political parties right now.
One thing those articles don't consider is if your career is causing high negative externalities in the world. Which banking arguable does (depend on what exactly you do, and your political views).
If so, then you need to give even more than what you earned just to undo what you did in your career.