Test your wits

Both suspects are guilty. That wasn't explicitly stated in the OP, but it is a standard part of the problem that both are guilty and so either can offer real testimony against the other.- Sure. But the problem is that neither suspect can really be certain that the other will be silent. And if a suspect is silent while the other one sings, then the silent one gets the worst punishment. If the partner does testify, then the suspect should also testify in order to get the more lenient punishment.On the other hand, if the suspect testifies while the partner remains silent, then she gets off scot-free.This is the dilemma. You are right -- the best outcome is if both remain silent. However, in examining the problem in terms of narrow self-interest, it is always better to rat out the other -- and so in the end both suspects, if they are rational and self-interested, end up with the not-best situation.- No. Just the opposite. In examining the situation, it appears that the situation calls for not having honor or integrity. The individual should testify, because no matter what the other does, you always come out ahead.Sure, if both have "honor and integrity", then they will be rewarded with the best possible outcome. However, neither suspect can really trust that the other will have honor and integrity, they are forced to conclude that they must act without honor and integrity.

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Speaking personally, I find few things more awesome than contemplating this vast and majestic process of evolution, the ebb and flow of successive biotas through geological time. Creationists and others who cannot for ideological or religious reasons accept the fact of evolution miss out a great deal, and are left with a claustrophobic little universe in which nothing happens and nothing changes.
-- M. Alan Kazlev