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Mediation and Peace

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Abstract

This paper brings mechanism design to the study of conflict resolution in international relations. We determine when and how unmediated communication and mediation reduce the ex ante probability of conflict, in a simple game where conflict is due to asymmetric information. Unmediated communication helps reducing the chance of conflict as it allows conflicting parties to reveal their types and establish type-dependent transfers to avoid conflict. Mediation improves upon unmediated communication when the intensity of conflict is high, or when asymmetric information is large. The mediator improves upon unmediated communication by not precisely reporting information to conflicting parties, and precisely, by not revealing to a player with probability one that the opponent is weak. Surprisingly, in our set up, arbitrators who can enforce settlements are no more effective in reducing the probability of conflict than mediators who can only make non-binding recommendations.

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File URL: http://cowles.econ.yale.edu/P/cd/d17b/d1765.pdf
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Bibliographic Info

Paper provided by Cowles Foundation for Research in Economics, Yale University in its series Cowles Foundation Discussion Papers with number 1765.

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Length: 51 pages
Date of creation: Aug 2010
Date of revision:
Handle: RePEc:cwl:cwldpp:1765

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Related research

Keywords: Mediation; War and peace; Imperfect information; Communication games; Optimal mechanism;

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References

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  1. Kennan, John & Wilson, Robert, 1993. "Bargaining with Private Information," Journal of Economic Literature, American Economic Association, vol. 31(1), pages 45-104, March.
  2. R. Aumann, 2010. "Subjectivity and Correlation in Randomized Strategies," Levine's Working Paper Archive 389, David K. Levine.
  3. Powell, Robert, 2006. "War as a Commitment Problem," International Organization, Cambridge University Press, vol. 60(01), pages 169-203, January.
  4. Cramton, Peter C. & Palfrey, Thomas R., 1990. "Ratifiable Mechanisms: Learning from Disagreement," Working Papers 731, California Institute of Technology, Division of the Humanities and Social Sciences.
  5. Banks, Jeffrey S. & Calvert, Randall L., 1992. "A battle-of-the-sexes game with incomplete information," Games and Economic Behavior, Elsevier, vol. 4(3), pages 347-372, July.
  6. Konstantin Sonin, 2008. "A Theory of Brinkmanship, Conflicts, and Commitments," Journal of Law, Economics and Organization, Oxford University Press, vol. 24(1), pages 163-183, May.
  7. Roger B. Myerson, 1977. "Incentive Compatability and the Bargaining Problem," Discussion Papers 284, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  8. Myerson, Roger B., 1982. "Optimal coordination mechanisms in generalized principal-agent problems," Journal of Mathematical Economics, Elsevier, vol. 10(1), pages 67-81, June.
  9. Tomz, Michael, 2007. "Domestic Audience Costs in International Relations: An Experimental Approach," International Organization, Cambridge University Press, vol. 61(04), pages 821-840, October.
  10. Roger B. Myerson & Mark A. Satterthwaite, 1981. "Efficient Mechanisms for Bilateral Trading," Discussion Papers 469S, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  11. Green, Jerry R & Laffont, Jean-Jacques, 1987. "Posterior Implementability in a Two-Person Decision Problem," Econometrica, Econometric Society, vol. 55(1), pages 69-94, January.
  12. Fearon, James D., 1995. "Rationalist explanations for war," International Organization, Cambridge University Press, vol. 49(03), pages 379-414, June.
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Cited by:
  1. Corchón, Luis C. & Yıldızparlak, Anıl, 2013. "Give peace a chance: The effect of ownership and asymmetric information on peace," Journal of Economic Behavior & Organization, Elsevier, vol. 92(C), pages 116-126.
  2. Maria Goltsman & Gregory Pavlov, 2012. "Communication in Cournot Oligopoly," UWO Department of Economics Working Papers 20121, University of Western Ontario, Department of Economics.

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