Prisoner's Dilemma

The most famous "game" from game theory is called the prisoner's dilemma. It can be used to illustrate useful game-theory concepts and can also be adapted to many life situations, including the arms race. Here's the setup: Suppose two criminals are captured and put in jail, each in their own cell with no way to communicate. The prosecutor doesn't have enough evidence to convict either one for a major crime but does have enough to convict both for minor infractions. However, if the prosecutor could get one of the prisoners to turn on their co-conspirator, the other one could be put away for the major crime. So the prosecutor offers each prisoner the same deal: the first one who betrays their partner walks free now, and anyone who stays silent goes to prison.