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two criminals were just caught robbing a bank. both are in prison, being questioned by police. during the interrogations, each prisoner is offered the choice to rat on the other. if neither rats the other out, they will both be set free. if one rats the other out, the rat goes free and the one he ratted out will get a long sentence. if both rat each other out, they'll both receive a light sentence. the prisoner's dilemma is: rat the other out? or stay silent, and hope he doesn't turn witness against you? the logical act is to rat, even though, if nobody ratted anyone out, everyone would benefit. the individual rational act leads to a group irrational behavior.
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