One of my ECONS101 students shared a very cool animated online tool or game, called "The Evolution of Trust". The site was created by Nicky Case, and it explains the importance of trust and cooperation in repeated prisoners' dilemma games. And bonus, there is plenty of opportunity to play the games as well, and guess the outcomes.
Trust and cooperation are important in the repeated prisoners' dilemma, because the dominant strategy in the prisoners' dilemma is to 'defect' (not to cooperate with the other player), even though if both players cooperated they would both be better off (see here or here for more on the prisoners' dilemma). The only way to ensure that both players cooperate is to develop a reputation for cooperating, and to trust that the other player will also cooperate.
I would have explained the initial game differently, as it seems to imply that the payoffs to the other player impact on your decision, when really you should only be concerned about the payoffs to yourself (although, as I used to show in ECON100, if players care about the payoffs to the other player, the prisoner's dilemma can turn into a coordination game, with a Schelling point where both players cooperate). However, there is plenty to like about the site, including my quote of the day: "Look around. The world's full of total jerkwads." Yes indeed.
Anyway, enough from me. Try it out for yourself!
[HT: Sam from my ECONS101 class]