Iran-US Nuclear Standoff: A Game Theory Approach

For almost three decades since the Iranian Revolution of 1979, there has consistently been a conflict between Iran and the United States over a host of issues. The relations between the two countries became more challenging since 2003 after it came to light that Iran had been developing its nuclear program. Since then some US officials have even gone so far as to announce - and repeat - the possibility of a military strike against Iranian facilities to end the nuclear program. In reality, up to now no such drastic action has taken place. Rather instead, in a milder reaction, the US, aided by its European allies and enjoying Russian and Chinese lukewarm acquiescence, has imposed several rounds of sanctions against Iran through the adoption of obligatory resolutions by the United Nations Security Council. But, these actions have failed to force the Iranians to end their program. As a result, many experts argue that a new policy should be pursued toward Iran vis-à-vis its nuclear dossier.( ) So the main challenge which poses itself is to predict when and how this conflict will come to an end. In this paper, different game theory models are used to interpret the current situation of the crisis. It is shown that while at each step it may be more favorable for each party to insist on its claims, the overall result of this approach may not be so favorable for all. As a result, both parties should think about the long term effects of their decisions. It is also shown that the absence of mutual trust could be the main factor that has forced both sides to reach the current point of crisis. Therefore, any attempt towards re-establishing mutual trust between the two governments might be a major step leading to a lasting solution. Furthermore, different possible choices for the US government and the long term effects of each choice will be analyzed. The analysis will also address economic aspects of the conflict, and the long-term effects of any decision and the best possible choices for both governments will be presented.