Game theory takes on different forms in many fields. Each field uses the approach in its unique way to acquire the desired results. Some classifications categorize the applications of the theory in numerous platforms. Some include the famous Prisoners Dilemma, The Nash Equilibrium, Real World Dilemmas, and Mixing Moves.
One significant example is the “Prisoners Dilemma.” It categorizes two bank robbers that end up making a poor selection for stealing a get-a-way car. The police arrest them but do not have any evidence linking them to the bank robbery. The separate them and implement a strategy to coerce them into a confession.
The authorities give each prisoner alternatives following their actions. The first is to admit that their partner robbed the bank allowing them to walk scot free while their partner serves a ten-year sentence. The other option is that they both agree to the robbery and each helps for seven years. The last option is that they both deny the bank robbery, but get charged for stealing the car and serve for two years.
The law enforcement is putting the two robbers on the spot. There are several scenarios causing dilemmas. If one partner rats out the other and walks, he may have to face his angry friends or family. Moreover, the convicted can send a crew to take their share of the money and enact vengeance for the betrayal.
The police’s hopeful option is that they both rat each other. The detainees’ best case scenario is that they both deny the allegations and serve two years for car theft. The game theory in applications has different possible outcomes, but with a result of jail time.
References
http://www.cracked.com/blog/5-easy-ways-to-understand-game-theory-for-jerks/
Digging into Game Theory 