You are a petty thief...
...who pulls heists with a partner.
You've both been caught by the police and are facing jail time. The police offer you a plea-bargain deal if you inform on your partner.
You can either stay quiet, but won't get the deal, or inform on your partner.
Remember that your partner has to consider the same deal.
If you both stay quiet, you both only go to jail for one year.
If you stay quiet, but your partner informs on you, you go to jail for five years while they walk free.
If you both inform on each other, then you both get significant jail time and go to jail for 3 years.
If you inform on your partner, but they stay quiet, you walk free while your partner goes to jail for five years.
Summary of the Prisoner's Dilemma PAYOFF MATRIX
Traditional PAYOFF MATRIX