Mediation, Walrasian Tâtonnement, and Negotiations as an Exchange Economy
AbstractAlternative dispute resolution (ADR) procedures, such as mediation and arbitration, are becoming increasingly used to help resolve disputes in a variety of areas. Among ADR procedures, mediation is the most utilized yet least analyzed procedure. This article examines negotiations and dispute resolution using the tools of general equilibrium theory. Specifically, mediators function as the Walrasian auctioneers of exchange theory by altering trade-off rates among bargaining issues. In this way, mediators facilitate a process leading towards voluntary settlements. This idea of Walrasian mediation is supported by the literature on mediation and mediator techniques, and so this insight opens up mediation to much more rigorous economic analysis. Among the implications of this approach are: (1) successful mediation leads to Pareto efficient settlements; (2) non-neutral mediators can guide negotiators towards preferred outcomes by introducing resources into mediation; (3) mediation Pareto dominates arbitration for resolving disputes.
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Bibliographic InfoPaper provided by Utah State University, Department of Economics in its series Working Papers with number 2003-11.
Length: 25 pages
Date of creation: Sep 2003
Date of revision:
mediation; dispute resolution; exchange economy;
Other versions of this item:
- David Dickinson, 2005. "Mediation, Walrasian Tatonement, and Negotiations as an Exchange Economy," Working Papers 05-05, Department of Economics, Appalachian State University.
- J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
- D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
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