Prisoners’ Dilemma is the standard example of game theory.
Two robbers are arrested and questioned by the police.
Should they both confess?
What if one confesses and the other does not?
- If they both rat each other out, both will serve 10 years in prison.
- If one rats and the other is silent, the former will be released, the later will serve 20 years in prison.
- If both remain silent, both will serve 2 years in prison.