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Toward an Understanding of Optimal Mediation Choice

Author

Listed:
  • Jin Yeub Kim

    (Yonsei University)

  • Wooyoung Lim

    (The Hong Kong University of Science and Technology)

Abstract

Mediation is a key strategic instrument for managing conflicts in bargaining scenarios with incomplete information. This paper reports the first systematic laboratory investigation into the informed principal problem concerning mediator selection. The theory of neutral optimum predicts that, in our environment, the informed principal's most reasonable choice is not the mediator that maximizes the ex-ante probability of peace; rather, the one preferred by the stronger type alone constitutes a credibly justifiable compromise between the conflicting interests of different types. We find that subjects do not choose the neutral mediator more often than the peace-maximizing one. Different principal types recognize the need for inscrutable selection and form intertype compromises, and they systematically view the peace-maximizing mediator as the more compelling compromise. The strategic reasoning underlying the neutral optimum fails to materialize in the lab.

Suggested Citation

  • Jin Yeub Kim & Wooyoung Lim, 2026. "Toward an Understanding of Optimal Mediation Choice," Working papers 2026rwp-283, Yonsei University, Yonsei Economics Research Institute.
    • Handle: RePEc:yon:wpaper:2026rwp-283
    as

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    References listed on IDEAS

    as
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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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