Mediation and Conflict Management
Mediation is a popular process to manage conflicts, but there is little systematic insight into its mechanisms. This paper discusses the results from an experiment in which a mediator can induce two conflict parties to behave cooperatively. If the mediator recommends cooperative behavior and threatens to punish deviations, she achieves the efficient solution. Similar results even obtain if the mediator is biased towards one party or has no incentive to prevent the conflict. Communication between the mediator and the conflict parties increases cooperation, even if punishment is impossible. However, when cooperation fails, communication without punishment leads to particularly low payouts for the ï¿½losingï¿½ party.
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