Mediation in Situations of Conflict and Limited Commitment

Roland Strausz and Kay Mitusch

Departmental Working Papers

Abstract: We study the reasons and conditions under which mediation is beneficial when a principal needs information from an agent to implement an action. Assuming a strong form of limited commitment, the principal may employ a mediator who gathers information and makes non--binding proposals. We show that a partial revelation of information is more effective through a mediator than through the agent himself. This implies that mediation is strictly helpful if and only if the likelihood of a conflict of interest is positive but not too high. The value of mediation depends non--monotonically on the degree of conflict. Our insights extend to general models of contracting with imperfect commitment.

Keywords: Mediation; Negotiation; Limited Commitment; Revelation Principle (search for similar items in EconPapers)
JEL-codes: D82 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm and nep-reg
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Related works:
Journal Article: Mediation in Situations of Conflict and Limited Commitment (2005)
Working Paper: Mediation in Situations of Conflict and Limited Commitment (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:bef:lsbest:023

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