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Mediation and Peace

Author

Listed:
  • Johannes Hörner
  • Massimo Morelli
  • Francesco Squintani

Abstract

This article applies mechanism design to the study of international conflict resolution. Standard mechanisms in which an arbitrator can enforce her decisions are usually not feasible because disputants are sovereign entities. Nevertheless, we find that this limitation is inconsequential. Despite only being capable of making unenforceable recommendations, mediators can be equally effective as arbitrators. By using recommendation strategies that do not reveal that one player is weak to a strong opponent, a mediator can effectively circumvent the unenforceability constraint. This is because these strategies make the strong player agree to recommendations that yield the same payoff as arbitration in expectation. This result relies on the capability of mediators to collect confidential information from the disputants, before making their recommendations. Simple protocols of unmediated communication cannot achieve the same level of ex ante welfare, as they preclude confidentiality.

Suggested Citation

  • Johannes Hörner & Massimo Morelli & Francesco Squintani, 2015. "Mediation and Peace," Review of Economic Studies, Oxford University Press, vol. 82(4), pages 1483-1501.
  • Handle: RePEc:oup:restud:v:82:y:2015:i:4:p:1483-1501.
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    File URL: http://hdl.handle.net/10.1093/restud/rdv022
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Mostafa Beshkar & Jee-Hyeong Park, 2017. "Dispute Settlement with Second-Order Uncertainty: The Case of International Trade Disputes," CAEPR Working Papers 2017-010, Center for Applied Economics and Policy Research, Department of Economics, Indiana University Bloomington.
    2. Herbst, Luisa & Konrad, Kai A. & Morath, Florian, 2017. "Balance of power and the propensity of conflict," Games and Economic Behavior, Elsevier, vol. 103(C), pages 168-184.
    3. Zheng, Charles Z., 2019. "Necessary and sufficient conditions for peace: Implementability versus security," Journal of Economic Theory, Elsevier, vol. 180(C), pages 135-166.
    4. Hannes Mueller & Christopher Rauh, 2019. "The hard problem of prediction for conflict prevention," Cahiers de recherche 2019-02, Universite de Montreal, Departement de sciences economiques.
    5. 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.
    6. Laurent-Lucchetti, Jérémy & Rohner, Dominic & Thoenig, Mathias, 2019. "Ethnic Conflicts and the Informational Dividend of Democracy," CEPR Discussion Papers 14182, C.E.P.R. Discussion Papers.
    7. Eguia, Jon X., 2022. "Multilateral regime change," Journal of Public Economics, Elsevier, vol. 205(C).
    8. Jin Yeub Kim, 2022. "Neutral public good mechanisms," PLOS ONE, Public Library of Science, vol. 17(4), pages 1-16, April.
    9. Kimbrough, Erik O. & Laughren, Kevin & Sheremeta, Roman, 2020. "War and conflict in economics: Theories, applications, and recent trends," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 998-1013.
    10. Goltsman, Maria & Pavlov, Gregory, 2014. "Communication in Cournot oligopoly," Journal of Economic Theory, Elsevier, vol. 153(C), pages 152-176.
    11. Wolton, Stephane, 2018. "Signaling in the shadow of conflict," MPRA Paper 83922, University Library of Munich, Germany.
    12. Iaryczower, Matias & Oliveros, Santiago, 2016. "Power brokers: Middlemen in legislative bargaining," Journal of Economic Theory, Elsevier, vol. 162(C), pages 209-236.
    13. Ganguly, Chirantan & Ray, Indrajit, 2015. "Information-Revelation and Coordination Using Cheap Talk in a Game with Two-Sided Private Information," Cardiff Economics Working Papers E2015/7, Cardiff University, Cardiff Business School, Economics Section.
    14. Michael D. König & Dominic Rohner & Mathias Thoenig & Fabrizio Zilibotti, 2017. "Networks in Conflict: Theory and Evidence From the Great War of Africa," Econometrica, Econometric Society, vol. 85, pages 1093-1132, July.
    15. Björn Gehrmann, 2019. "Third-party diplomacy," HiCN Working Papers 312, Households in Conflict Network.
    16. Michael D. König & Dominic Rohner & Mathias Thoenig & Fabrizio Zilibotti, 2016. "The Long-lasting Shadow of the Allied Occupation of Austria on its Spatial Equilibrium," HiCN Working Papers 231, Households in Conflict Network.
    17. Dominic Rohner, 2018. "Success Factors for Peace Treaties: A Review of Theory and Evidence," Cahiers de Recherches Economiques du Département d'économie 18.08, Université de Lausanne, Faculté des HEC, Département d’économie.
    18. Correia-da-Silva, João, 2020. "Self-rejecting mechanisms," Games and Economic Behavior, Elsevier, vol. 120(C), pages 434-457.
    19. Meirowitz, Adam & Morelli, Massimo & Ramsay, Kristopher & Squintani, Francesco, 2019. "Third Party Intervention and Strategic Militarization," CEPR Discussion Papers 13879, C.E.P.R. Discussion Papers.
    20. Kim, Jin Yeub, 2017. "Interim third-party selection in bargaining," Games and Economic Behavior, Elsevier, vol. 102(C), pages 645-665.
    21. Andrea Canidio & Joan-Maria Esteban, 2018. "Benevolent Mediation in the Shadow of Conflict," Working Papers 1027, Barcelona School of Economics.
    22. Govinda Clayton & Han Dorussen, 2022. "The effectiveness of mediation and peacekeeping for ending conflict," Journal of Peace Research, Peace Research Institute Oslo, vol. 59(2), pages 150-165, March.
    23. Raphaela Hennigs, 2019. "Conflict Prevention by Bayesian Persuasion," Working Papers tax-mpg-rps-2019-16_1, Max Planck Institute for Tax Law and Public Finance.
    24. Gehrmann, Björn, 2019. "Krieg, Frieden und Mediation - eine wettkampftheoretische Perspektive [War, Peace and Mediation - a Contest Theory Perspective]," MPRA Paper 93645, University Library of Munich, Germany.
    25. Catalina Tejada & Eliana Ferrara & Henrik Kleven & Florian Blum & Oriana Bandiera & Michel Azulai, 2015. "State Effectiveness, Growth, and Development," Working Papers id:6668, eSocialSciences.

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    More about this item

    Keywords

    mediation; arbitration; cheap talk; mechanism design; conflict;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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