Last year, AlexMennen ran a prisoner's dilemma tournament with bots that could see each other's source code, which was dubbed a "program equilibrium" tournament. This year, I will be running a similar tournament. Here's how it's going to work: Anyone can submit a bot that plays the iterated PD against other bots. Bots can not only remember previous rounds, as in the standard iterated PD, but also run perfect simulations of their opponent before making a move. Please see the github repo for the full list of rules and a brief tutorial.
There are a few key differences this year:
1) The tournament is in Haskell rather than Scheme.
2) The time limit for each round is shorter (5 seconds rather than 10) but the penalty for not outputting Cooperate or Defect within the time limit has been reduced.
3) Bots cannot directly see each other's source code, but they can run their opponent, specifying the initial conditions of the simulation, and then observe the output.
All submissions should be emailed to pdtournament@gmail.com or PM'd to me here on LessWrong by September 15th, 2014. LW users with 50+ karma who want to participate but do not know Haskell can PM me with an algorithm/psuedocode, and I will translate it into a bot for them. (If there is a flood of such requests, I would appreciate some volunteers to help me out.)
Oh, yes, of course; the best response to TFT-1 is clearly TFT-2, and so on.
As for how well strategies do, while it's clear that it will depend on the strategies of other contestants and in that sense there cannot be a "best strategy", I think one can do better - for example, if there's a Nash Equilibrium strategy that isn't simply (Defect, Defect).
At a bare minimum, you can improve upon TFT by also making sure it defects against CooperateBots, and doesn't wait until the second turn to defect against DefectBots. Of course, there may indeed be JusticeBots out there who punish you for defecting against CooperateBots...
That's assuming that the new algorithm can correctly identify its opponents. Also, if other algorithms correctly sense that yours is opportunistic, they might change their strategy to your detriment.