Game theory and economic implementation

[The One and Only...]

What do you guys think of the growing use of game theoretical tools within post-Chicago economics?

For example, Prisoner's Dilemma is sometimes used to explain an entrepeneur's position within the market place.

I think it's useful, but is severely limited within it's scope. Why? Well, for one thing, I am skeptical of any argument that makes it's basis on backwards induction, which many game theorists do to justify regulation.