In Shirley Jackson's short story "Charles," Laurie is a kindergartner who comes home starting on the first day of school with outrageous stories about a little boy in class. The little boy's name is Charles, and he is quite a character. He says naughty things which Laurie takes great pleasure in repeating; he does rebellious things which Laurie enjoys shocking his parents with.
Somehow, of course, Laurie is free to all kinds of equally naughty things when he talks to his parents about Charles's exploits at school. For example:
“What?” his father said, looking up. “Look down,” Laurie said. “Look at my thumb. Gee,you’re dumb.” He began to laugh insanely.
In another setting this disrespectful behavior would have gotten him in big trouble; however, Laurie says this to his father in the middle of a Charles story, and all his father wants to know is what else Charles did at school today. We hear about bad words, cruel pranks, disrespect of the teacher and more; every day is an adventure for Laurie's kindergarten class, and he brings that adventure home to his own family.
While this is amusing once or twice, it is the repeated pattern, the daily recounting of Charles's naughty exploits which really creates a running joke. Of course, the joke is on Laurie's family because they do not realize the truth: that Laurie is Charles and Charles is Laurie. While perhaps it should have been obvious to them, it was not. Once they know, however, they must surely realize the joke has been on them. They have been "played" by their five-year-old son.