USA vs. Germany

Often times finding a scenario similar to Game Theory's Prisoner's Dilemma in the real world is difficult. However, this past summer in Brazil, one such scenario arose. As a point of review, the Prisoner's Dilemma is a situation in which a dominant strategy exists for each player and the outcome that is reached is not Pareto efficient. This means that each player, regardless of the other player's move, has a strategy that will maximize their utility. And in the equilibrium reached from these dominant strategies, a change in the equilibrium can make one person better off without the other being made worse off. A situation similar but not identical to this situation occurred in the World Cup.

Elaborated upon in this article from the Wall Street Journal, the US Men's National Team and Germany's National Team reached a situation where a Pareto efficient equilibrium could be reached if they both tie and guarantee an advance to the next round. However, each team could gain from breaking that agreement and winning the game. This outcome would be better off for the individual team who won because of advantages of seeding for the next round. So the dominant strategy for each team is competing and the equilibrium reached is a situation where one team goes through and the other team might go through (depending on the result of the game between the other two teams in the group). This outcome is not Pareto efficient because both teams are not guaranteed a spot in the next round. If each team lay down for 90 minutes and decided to tie, both teams would be guaranteed a spot in the next round.