These examples are horrible oversimplifications and just not how real life works. Take the prisoners' dilemma: what the two do will absolutely depend on their relationship. If they are friends and trust each other, neither is going to say anything. If they aren't, they will both likely testify while doing all they can to prevent the other one from doing the same. If person A has power of any kind (money, violence, fear...) over person B, A will testify and walk free as B cannot oppose them. Arms race on the other hand is a non-issue; once both sides have weapons of mass destruction, they effectively prevent the other from doing the first move through fear and sense of self-preservation. Nobody wins when two nations lob WMDs at each other, and doing so much damage with your first strike that the opposing side can't respond is practically impossible, there is always some time to launch your nukes in retaliation before your country burns to shit. If one side were to pull the trigger, it would lead to mutual destruction, but that goes against the natural instinct of self-preservation. That's why we haven't nuked ourselves to hell so far.