https://arbital.com/p/logical_dt/
Summary: LDT is a decision theory that is able to recognise that the decisions of all agents who implement LDT will be correlated. When it makes a decision it knows that it's making the decision for its entire decision-theoretic equivalence class. If it ever decided to knowingly do a thing that is "individually rational" but collectively disastrous, in cases where the personal cost of the disaster outweighs the personal benefits of defecting, then it would be malfunctioning.
I put quotes around "individually rational" because, in light of LDT, CDT is not really rational. It performs worse. It doesn't win.
And, personally, I don't think the old model of decisionmaking was closer to what humans intuitively consider to be sane, effective decisionmaking, I think we had to be taught to be ruthless parasites who can't keep promises, and I hope we can unlearn that now.
One of the roles of government is to impose rules and regulations that steer individual (and corporate) self-interest in directions which are widely agreed to be in the interests of civilisation (like preventing/mitigating climate change) but which would otherwise be ignored or worsened if left to individuals or corporations.
Yes, individuals acting rationally is just the thing. If we look closely enough at a civilisation or other group of people, it does break apart into individuals. The individuals are the ones who ultimately has the capacity to act, and has goals (a utility function) and knowledge to base their acts upon.
Hence the old saw's insistence on "enlightened self interest".