When Margaret builds a missile, Nikita’s payoff from building a missile as well is −10; it is −20 if he does not. The same set of payoffs holds for Margaret when Nikita builds a missile: her payoff is −10 if she builds one as well, −20 if she does not. So it is a Nash (or noncooperative) equilibrium for both Margaret and Nikita to build missiles, and their total payoff is (−10) + (−10) = −20. But their total payoff is greatest when neither builds a missile: their total payoff is 0 + 0 = 0. But this outcome—the cooperative outcome—is unlikely. If Margaret builds a missile but Nikita does not, Margaret gets a payoff of +8, rather than the 0 she gets if she doesn’t build a missile. So Margaret is better off if she builds a missile but Nikita doesn’t. Similarly, Nikita is better off if he builds a missile but Margaret doesn’t: he gets a payoff of +8, rather than the 0 he gets if he doesn’t build a missile. So both players have an incentive to build a missile. Both will build a missile, and each gets a payoff of −10. So unless Nikita and Margaret are able to communicate in some way to enforce cooperation, they will act in their own individual interests and each will build a missile.