In real life, I try to enter arrangements with people who show a comprehension of the idea that 'mutual teamwork leads to further teamwork, which leads to the greatest long-term benefit'. If I can, I try to determine if they have a history of teamwork. For example, there are many people on this board who do not show an understanding of this topic; believing that relative success is more important, without realising that it's also (by neccessity) temporary. This means that, in general, I will not actually risk effort by entering into an arrangement with them. The best they can hope for is to Free Ride off of my life.
As well, I try to introduce the concept of escalating benefits to my partners. Failure to cooperate on a $10 deal means I will not use them for a $100 deal later, but someone else. This is where the application to my real life kicks in the best.
I'm assuming that there's no history of my partner to judge him with in the following, but I assume a communication level where my partner seems to understand the concept of 'opportunity cost'. In that, my partner understands that every round that we screw each other is a round that he loses two potential points. The end of the second round of screwing me results in a point being lost from his total.
Step 1: explain my game-strategy to my partner.
Step 2: Start with cooperation
Step 3: In general, I will cooperate.
Step 4: If I am defaulted on, then I will default until the opponent willingly returns the points to equality (he cooperates when I default). Upon the end of the second round after defaulting on me, his point total is lower than it could have been through cooperation.
Step 5: If I am defaulted on again, I will refuse to cooperate until the opponent puts himself in debt to me (cooperates twice with my defaulting twice).
Step 6: Once the number of rounds since the last default is > the number of rounds before the last default, I will willingly put myself back to equal status by allowing a default against me. I will then cooperate again.
Repeat.
This means that I can lose if I'm tricked in one, or two round game. I can also lose if my opponent screws me on the last round of the game.