Chaos Report: Iran's Response Matrix
A Game Theory Analysis
Iran is in a classic decision-making bind: it has to retaliate but it must also be able to survive.
However, there is already a problem: it is thinking too much and acting too late. For the Iranian regime, there is too much at stake and too little regional or global support for a total war. Additionally, the global context is not conducive to serious escalation.
Let’s break down Iran’s decision options through a game-theory analysis.
Key players: Iran backed by Russia vs. Israel backed by the United States
Regional Configuration: Pro-US Arab states and Iran/Russia-backed proxies
International Environment: US election season with a possible return of Trump, ongoing Ukraine war, and looming economic recession.
Running the analysis for Iran reveals three core variables that must align before it decides on the scale of its response. These variables include:
Domestic Public: A population growing weary of the regime.
Regional Proxies: Iran’s proxies are stretched too thin and for too long to sustain a new round of war.
Russia: Not entirely reliable due to its deep engagement in Ukraine and its bets on the US elections.
The regime in Iran understands that getting drawn into a full-blown war could reset their domestic power structure, jeopardizing their survival. They can't risk that, since that’s their holy grail. But it also must restore its honour, and credibility to its public and regional proxies.
Given these constraints, Iran's decision matrix does not favour waging a catastrophic war, as the payoff is negligible compared to the possible costs.
However, retaliate it must, to overcome the humiliation of being hit in the heart of Tehran. Therefore, in the absence of a full-scale war resulting in total victory over Israel, Iran is likely to opt for a targeted proxy attacks on sensitive targets coupled with intense information warfare. For Iran, the optics of war and perceived victory may be preferred over actual war and potential defeat.
Perhaps this is exactly why Israel gambled to assassinate Ismail Haniyeh in Tehran. Any game theory analysis would have suggested to Israel that for Iran, the option of a total war was not going to be a viable one.
But as it is with chaos, it’s hard to predict and control. What is certain, though, is that no regional or global actor wants a total war, not even Iran. An optics of war and escalation, probably most likely?