I guess so. Retaliation is the best strategy in iterative PD, no? (I'm rusty on this stuff).
Nash equilibrium in a regular PD would be DD, but it assumes that the other side will defect. I think from experience that the payoff grid is different in business in that instead of CC resulting in a lower payoff for C than for D in CD, it's a much higher payoff; and the D in CD is not getting much more than in DD (maybe 20% more).
You are thinking of tit for tat, right? I remember reading about generous T4T where in ~10% of the cases they were generous [CITATION NEEDED] it performed better that pure retaliation. Now there is a new paper in Nature[1] that I just stumbled onto in trying to answer your question. It seems like extortion is at least competitive with a generous strategy, though I need to give it a closer read.
