A Revealed Preference approach to diplomacy - President's Press Conference

Q Yes, sir. The Iranians have dismissed the European incentive as insignificant. Should more incentives be offered? How long do they have until you take their case to the Security Council?

THE PRESIDENT: Well, I -- first of all, I want to thank our European friends for taking the lead on this issue, telling the Iranians that they should permanently abandon any enrichment or reprocessing to make sure that Iran does not develop a nuclear weapon.

Let me review the bidding on this, if I might, just kind of the history, right quick. Iran has concealed its -- a nuclear program. That became discovered, not because of their compliance with the IAEA or NPT, but because a dissident group pointed it out to the world, and -- which raised suspicions about the intentions of the program. You can understand why. It's a non-transparent regime, they're run by a handful of people. And so suspicions were raised. And as a result of those suspicions, we came together with friends and allies to seek a guarantee that they wouldn't use any nuclear program to make weapons. A lot of people understand that if they did have a weapon, it would create incredible instability; it wouldn't be good for world peace.

People respond to incentives. And, when they don't, that tells you something. (See, revealed preference.)