Mediators and Mechanism Design: Why Firms Hire Consultants

Kay Mitusch () and Roland Strausz

Departmental Working Papers

Abstract: This paper offers a new type of explanation for economic institutions as playing the role of mediators in the sense of Myerson (1985) to facilitate communication in contracting settings with ex ante asymmetric information and limited commitment. It derives necessary and sufficient conditions under which mediation is strictly helpful and provides a straightforward, yet general intuition for this result. As an application of our idea we explain the widely observed use of consultants during the restructure of firms.

Keywords: mechanism design; communication equilibrium; limited commitment (search for similar items in EconPapers)
JEL-codes: C72 D82 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://userpage.fu-berlin.de/%7Elsbester/papers/consult.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

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:bef:lsbest:005

Access Statistics for this paper

More papers in Departmental Working Papers
Bibliographic data for series maintained by XXX ( this e-mail address is bad, please contact ).