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the prisoners dilemma is one example of something game theory studies lets assume Alice and Tom are caught stealing wallets game theory assumes theyre both rational and self-interested the regular punishment for what they did is one year in jail each however lets also assume the police expects one of them was involved in a more serious offense stealing valuable paintings from a museum Alice is offered a deal by the police if she testifies against Tom for the more serious crime and Tom doesnt testify against her she gets 0 jail time but Tom gets eight years Tom gets the same offer if none of them testifies each person only gets one year in jail if both of them testify they get three years each obviously it seems in their best interest that neither of them testifies as only two years of total jail time would result one for each however lets look at things from their perspective Alice sees that if she doesnt testify there are two outcomes one in which she gets one year and one in w
