Shuttle diplomacy

Piero Gottardi and Claudio Mezzetti

Journal of Economic Theory, 2024, vol. 216, issue C

Abstract: In practice mediation operates through shuttle diplomacy: the mediator goes back and forth between parties, meeting them in private. We model shuttle diplomacy as a dynamic procedure. The mediator helps each party to gradually discover (privately) her value from settlement and re-assess her bargaining position, while also proposing the terms of the deal. We show that shuttle diplomacy always allows parties to achieve an ex-post efficient final settlement. In contrast, this is not possible with a static mediation procedure. In addition, if parties have symmetric prior value distributions, shuttle diplomacy guarantees a fair split of the social value from settlement.

Keywords: Mediation; Mechanism design; Information design; Diplomacy (search for similar items in EconPapers)
JEL-codes: C72 D47 D82 D86 (search for similar items in EconPapers)
Date: 2024
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Working Paper: Shuttle Diplomacy (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:216:y:2024:i:c:s0022053123001904

DOI: 10.1016/j.jet.2023.105794

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