Mediation and Peace

Johannes Hörner, Massimo Morelli () and Francesco Squintani

The Review of Economic Studies, 2015, vol. 82, issue 4, 1483-1501

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.

Keywords: mediation; arbitration; cheap talk; mechanism design; conflict (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (35)

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Related works:
Working Paper: Mediation and Peace (2015)
Working Paper: Mediation and Peace (2011)
Working Paper: Mediation and Peace (2010)
Working Paper: Mediation and Peace (2010)
Working Paper: Mediation and Peace (2010)
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