Nobel economics laureate Thomas Schelling suggested that "a reputation for recklessness, unreasonable demands, and being an unreliable character" improves one's chances of extracting concessions in negotiations over war and peace. By that standard, U.S. President Donald Trump and Iran's hardline leaders deserve what might be called the "Schelling Prize." They have been consumed with ratcheting up tensions without clearly defined goals or a strategy to de-escalate. But now, both sides appear to have taken a step back from the brink.
With only hours remaining before Trump's ultimatum — threatening to devastate Iran's power plants unless it agreed to reopen the Strait of Hormuz — the game of chicken between the two sides was dramatically suspended. Trump made a surprise announcement that he had "very good and productive discussions regarding resolving hostilities in the Middle East." He added that he would "delay the attack on Iran's power plants by five days." Trump has previously made similar claims to signal a negotiating breakthrough, only to quickly reverse course and launch fierce attacks. This time, however, Iran's Foreign Ministry spokesperson officially confirmed that messages seeking ceasefire negotiations had been conveyed through "friendly nations."
The essence of a game of chicken is making the other side believe you are prepared to crash your car. As strategist Herman Kahn noted in his 1965 book "On Escalation," one surefire way to win a game of chicken is to rip the steering wheel off and throw it out the window — a signal that you are completely out of control. The problem is that even if you win this way, surviving is another matter.
Trump may appear to be a risk-taker, but he possesses a strong instinct for self-preservation even amid the chaos he creates. In this war, he approached the brink but did not slide close enough to fall off. This is precisely the problem with the Trumpian way of waging war: bluff and bluster alone cannot deliver a decisive victory. The Strait of Hormuz blockade made clear that Iran holds a lethal leverage capable of driving the global economy toward ruin.
Trump tends to court risk only up to the threshold of unbearable pain. This has been dubbed "TACO" — a mocking acronym for "Trump Always Chickens Out." The lesson we have drawn from this war is that Trump appears never to have learned the business principle: "Don't bet what you can't afford to lose."
Even before the U.S. announcement of peace talks, signs were emerging that diplomatic channels were reopening. One was Trump's own signal, which could only be described as desperate to end the conflict. He displayed a flurry of moves — from demanding "unconditional surrender" to declaring the war over and threatening to destroy Iran's power plants. Another sign was that Trump quietly encouraged mediation efforts by Qatar and Türkiye, both adversaries of Israel. Qatari officials had been exploring terms for a compromise before Iran attacked Qatar's Ras Laffan gas field. Turkish Foreign Minister Hakan Fidan announced he was in talks with U.S., Iranian, and European counterparts to forge a potential deal.
A third signal came from Iran itself. Foreign Minister Abbas Araghchi recently delivered an intriguing message, stating that "the Strait of Hormuz is not blockaded" and that "ships are hesitant to navigate because of insurers' fears over the war triggered by the United States and Israel." He also warned: "There can be no freedom of navigation without freedom of trade. Either respect both, or expect neither."
De-escalation is a rational choice when a crisis has reached this level of severity and there is no clear path to victory at an acceptable cost. But we should not delude ourselves into thinking that the type of agreement Trump and Iran's leaders are pursuing will resolve the fundamental problems underlying this conflict. Iran's nuclear program may be set back, but the malign regime that created it will not disappear.
As the war hurtles toward its climax, the greatest concern is the people caught in the crossfire. The Iranian people, who took to the streets in massive protests against the regime, paid the price of tens of thousands of lives lost to brutal crackdowns. The true victims are ordinary Iranians. They must not be left stranded at the edge of the cliff.