When companies are faced with making a decision between multiple risky options, they will often seek out information in order to reduce their uncertainty. So, a pharmaceutical firm will conduct clinical trials in order to determine if a drug is safe or dangerous, information that could mean the difference between profitable sales and damaging litigation. Such an investment in information is never free -- indeed, it often comes at a significant cost that must be weighed against the value of the knowledge obtained.
In this sense, the recently concluded U.S.-Iran talks in Geneva can be considered a diplomatic purchase of information. The United States, by offering to remove Iran's low-enriched uranium and turn it into the raw material required to make medical isotopes, is testing Iran's claim of peaceable intent and the Obama administration's hopes for engagement. If the Iranians comply, they may be open to further compromise, perhaps as a result of the political pressure they have faced at home since the summer's election turmoil. Their refusal, on the other hand, would serve as a clear signal of intransigence and lead Washington to pursue an alternative path. The most likely result is somewhere in between -- Iran gives no clear answer, but seeks to draw out talks and divide the P5+1 -- meaning that the United States has to ensure that we and our allies agree on what constitutes an acceptable response from Tehran. Whatever the result, it is a bold and innovative gambit by the United States, and the Iran hands at the National Security Council should be commended for devising it.
Read Full Article »