Iran’s nuclear program and the west’s response: A game theoretic approach

Abstract

Iran’s nuclear power program is conceived as a dangerous addition to the already highly explosive situation in the Middle East. This paper proposes a game theoretic model between Iran (to side step the non-proliferation treaty) and the West (imposing sanctions). Our analysis suggests that it requires substantial benefits (a ‘carrot’) offered by the West for Iran to stop its program if the West’s strategy is restricted to (economic) sanctions of a subset of countries. The game is then extended beyond the current conflict in order to understand why Iran chose this kind of a brinkmanship strategy in the first place and whether and if what this choice reveals about Iran’s strength or weakness.