Toward an Understanding of Optimal Mediation Choice

Jin Yeub Kim and Wooyoung Lim
Additional contact information
Jin Yeub Kim: Yonsei University
Wooyoung Lim: The Hong Kong University of Science and Technology

No 2026rwp-283, Working papers from Yonsei University, Yonsei Economics Research Institute

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.

Keywords: Informed Principal Problems; Mechanism Selection; Mediation; Inscrutability; Neutral Optimum; Laboratory Experiments (search for similar items in EconPapers)
JEL-codes: C72 C91 D82 (search for similar items in EconPapers)
Pages: 47pages
Date: 2026-03
New Economics Papers: this item is included in nep-des, nep-exp, nep-gth and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://121.254.254.220/repec/yon/wpaper/2026rwp-283.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:yon:wpaper:2026rwp-283

Access Statistics for this paper

More papers in Working papers from Yonsei University, Yonsei Economics Research Institute Contact information at EDIRC.
Bibliographic data for series maintained by YERI ().