Prisoner's Dilemma

Prisoner's dilemna is a game that is used to study cooperative and non cooperative behaviour.  In the out come analysis there are 4 possibilities:
1) You win, I lose
2) You lose, I win
3) We lose
4) We win.

When I first studied this a quarter century ago I was struck by the finding that most people are unable to achieve the we win solution because they must forfeit the I win you loose option to achieve we win. Hence more commonly people end up in the 'we lose' scenario.

The game is described as follows:

Two men are arrested, but the police do not possess enough information for a conviction.
The men are separated.
Police offer both a similiar deal.
- if one testifies against the partner (defects/betrays) and the other remains silent (cooperates/assists), the betrayer goes free and the cooperator receives the full one year sentence.
If both remain silent, both are sentence to only one month in jail for a minor charge.
If each 'rats out' the other, each receives a thre month sentence.
Each prisoner must choose either to betray or remain silent; the decision of each is kept quiet.
What should they do?