Kane and Nestor exploited a bug in video poker machines to win hundreds of thousands. So the casinos had them arrested. But the Fed’s case began to fall apart. No, they had not hacked any computers. They just pushed the right buttons. In a final desperate attempt to win their case, the Feds tried blackmail backed by a classic game.
“Prosecutors had a weak hand, and they knew it. As a December 3, 2013, trial date approached, the Feds made Kane and Nestor separate but identical offers: The first one to agree to testify against the other would walk away with five years of probation and no jail time.” (Wired)
Fortunately, Kane and Nestor played honorably (not rationally) and were freed a month later. Not only are people irrational (not sociopathic as standard econ assumes), but it’s a good thing they are not.