Applying Game Theory to the U.S. - Iran Conflict (Pdf version of Prezi)

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Applying Game Theory to the U.S. - Iran Conflict Based on an interview with H.E. Dr. Saeed Seyed Agha Banihashemi, Ambassador to Hungary of the Islamic Republic of Iran This paper looks at the idea of applying a mathematical model to international negotiations, specifically to the difficulties between Iran and the U.S. The use of applied mathematics is already happening in business, where automated systems developed by IT researchers are used to negotiate deals on behalf of human agents. Could the technology be used to solve international political disputes? Relations between nations can be modelized using Game Theory, which provides tools to predict the future. While the complex mathematics tends to restrict the field to specialists, simple mathematical models comprehensible to non-specialists can be applied to economics, politics, international relations, social science and law. In daily life people strategize when they make purchasing decisions or decide about relationships. Good strategies lead to optimal outcomes and bad strategies produce conflict. Game theory teaches people how to optimize their welfare by selecting the best strategy and it is the same for business or international relations. Conflict between nations is the result of bad decisions. If it can be demonstrated that a proposed decision will have negative consequences, politicians may be persuaded to refrain from taking that decision. Game theory can be used to compare the outcomes of decisions and select the optimal one. The principle is illustrated by a model of the U.S. - Iran conflict where each party selects one of two strategies: acquiesce or rebel for Iran and acquiesce or punish for the U.S. Payoffs - gain, loss or zero - are a function of the strategies adopted and by comparing the potential consequences of combinations of decisions by both parties the model predicts the decisions required for an optimal outcome.