On the topic of "utilities in the prisoner dilemma coinciding with jailtime" I quote one of my guest blog posts: http://phd.kt.pri.ee/2009/01/27/the-real-prisoner-dilemma/

Two hardened criminals are taken to interrogation in separate cells. They are offered the usual deal: If neither confesses, both get one year probation. If both confess, both do 5 years in jail. If one confesses, he goes free but the other does 10 years hard time.

Here’s what actually goes through their minds: “Okay, if neither of us confesses, we have to go back to the real world. But its so hard there! But if I confess, he will kill me when he gets out.. so thats bad… If both of us confess, then we can just get back to jail and continue our lives!”

Lateral thinking, people ;)