Mediation in Situations of Conflict

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Mediation in Situations of Conflict

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Kay Mitusch (Free University of Berlin)
Roland Strausz (Free University of Berlin)

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Roland Strausz

Abstract

We study the effectiveness of mediators in situations of conflict. In a game of cheap talk a principal may employ a mediator whose task is to gather information and make non--binding proposals. We show that mediators facilitate information transmission and are helpful if and only if the likelihood of a conflict of interest is strictly positive but not too high. Mediation increases the amount of information that can be induced in equilibrium and is helpful when full information revelation is not feasible. The insights of this paper extend to general models of mechanism design with imperfect commitment of the contract designer.

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Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 0361.

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Date of creation: 01 Aug 2000
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Handle: RePEc:ecm:wc2000:0361

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Hart, Oliver D & Tirole, Jean, 1988. "Contract Renegotiation and Coasian Dynamics," Review of Economic Studies, Blackwell Publishing, vol. 55(4), pages 509-40, October. [Downloadable!] (restricted)
Other versions:
- Oliver D. Hart & Jean Tirole, 1987. "Contract Renegotiation and Coasian Dynamics," Working papers 442, Massachusetts Institute of Technology (MIT), Department of Economics.
Forges, Francoise M, 1986. "An Approach to Communication Equilibria," Econometrica, Econometric Society, vol. 54(6), pages 1375-85, November. [Downloadable!] (restricted)
Matthews, Steven A. & Postlewaite, Andrew, 1989. "Pre-play communication in two-person sealed-bid double auctions," Journal of Economic Theory, Elsevier, vol. 48(1), pages 238-263, June. [Downloadable!] (restricted)
Other versions:
- Steven A. Matthews & Andrew Postlewaite, 1987. "Pre-Play Communication in Two-Person Sealed-Bid Double Auctions," Discussion Papers 744R, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
Forges, Francoise, 1988. "Can sunspots replace a mediator?," Journal of Mathematical Economics, Elsevier, vol. 17(4), pages 347-368, September. [Downloadable!] (restricted)
Kay Mitusch & Roland Strausz, . "Mediators and Mechanism Design: Why Firms Hire Consultants," Papers 005, Departmental Working Papers. [Downloadable!]
Drew Fudenberg & David K. Levine & Eric Maskin, 1994. "The Folk Theorem with Imperfect Public Information," Levine's Working Paper Archive 394, David K. Levine. [Downloadable!]
Other versions:
- Drew Fudenberg & David K. Levine & Eric Maskin, 1994. "The Folk Theorem with Imperfect Public Information," Levine's Working Paper Archive 2058, David K. Levine. [Downloadable!]
- Fudenberg, D. & Levine, D.K. & Maskin, E., 1989. "The Folk Theorem With Inperfect Public Information," Working papers 523, Massachusetts Institute of Technology (MIT), Department of Economics.
- Fudenberg, Drew & Levine, David I & Maskin, Eric, 1994. "The Folk Theorem with Imperfect Public Information," Econometrica, Econometric Society, vol. 62(5), pages 997-1039, September. [Downloadable!] (restricted)
Helmut Bester & Roland Strausz, . "Imperfect Commitment and the Revelation Principle," Papers 004, Departmental Working Papers. [Downloadable!]
Laffont, Jean-Jacques & Tirole, Jean, 1988. "The Dynamics of Incentive Contracts," Econometrica, Econometric Society, vol. 56(5), pages 1153-75, September. [Downloadable!] (restricted)
Other versions:
- Jean-Jacques Laffont & Jean Tirole, 1985. "The Dynamics of Incentive Contracts," Working papers 397, Massachusetts Institute of Technology (MIT), Department of Economics.
Forges, Francoise, 1990. "Equilibria with Communication in a Job Market Example," The Quarterly Journal of Economics, MIT Press, vol. 105(2), pages 375-98, May. [Downloadable!] (restricted)
Myerson, Roger B, 1986. "Multistage Games with Communication," Econometrica, Econometric Society, vol. 54(2), pages 323-58, March. [Downloadable!] (restricted)
Other versions:
- Roger B. Myerson, 1984. "Multistage Games with Communication," Discussion Papers 590, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-51, November. [Downloadable!] (restricted)

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