Amirali R. Davoudpour
Iranian Canon of Medicine and Law, Administrative Wing of Law and Healing Association, Iranian Watchdog of Medicine and Law, Tehran-Iran
Accepted and published December, 2025
Corresponding Email: davoudpour@iintbar.org
This article is published under CC BY 4.0 creative common license that Allows others to distribute, remix, adapt, and build upon the work, even commercially, as long as they credit the original creator.
Citation: Davoudpour, A. R. (2025). Currency Protests and External Coercion in Iran: A Nash Equilibrium Analysis of Sanctions, Conflict, and Economic Instability. Journal of Iranian International Legal Studies, 11(1), A1. https://doi.org/10.5281/zenodo.18087035
Abstract
Iran’s December 2025 currency crisis saw the rial depreciate to 1,420,000 IRR per USD amid 42.3% annual inflation and nationwide protests (Central Bank of Iran, 2025; Trading Economics, 2025). This study applies non-cooperative game theory to assess whether domestic protests can achieve currency stabilization under external sanctions. We model a three-player game among the Iranian state, external actors (U.S., EU, Israel), and domestic society, deriving a unique subgame perfect Nash equilibrium of coercion-sanctions-protests. Results show domestic actions alone fail to shift the Pareto-inferior equilibrium; structural change via sanctions relief is required. Simulations confirm equilibrium stability under parameter uncertainty.
Keywords: Nash equilibrium, economic sanctions, currency crisis, Iran, political economy, coercive equilibrium