Then the best course of action is to confess, and go free. Even if the other prisoner does confess, it will be better to have done likewise - at least the sentence will be lower. Both prisoners will reason thus, so both will confess and end up serving sentences of three years - even though, if both had remained silent, both would have served sentences of only two years. It may not be immediately clear what the relevance of the Prisoner's Dilemma is to Smith's theory of the Invisible Hand. In fact, it has a number of implications for economic behaviour.
Similar choices have to be made all the time in economic society.
When two people freely agree to exchange goods or services to their mutual benefit, each must decide whether to try to cheat the other by defaulting, or handing over counterfeit goods, or whether to act in good faith and risk the other party defaulting. The result may well be that the parties are unable to carry out the exchange as arranged, and both lose out. The reason we don't see this behaviour too often is because we live in a society where courts can enforce contracts. This reduces the fear of the other party defaulting, and makes it easier to hand over goods ahead of receiving whatever is to be exchanged for them. In illegal exchanges, for example, receiving stolen goods, default is more common, and rather difficult for criminals to guard against.