Shuttle Diplomacy

Piero Gottardi and Claudio Mezzetti

No 16934, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper studies the role of a mediator in helping two parties to evaluate the merits of their positions in economic disputes and to facilitate settlement. In practice, mediation often operates through shuttle diplomacy; the mediator goes back and forth between the parties meeting them in a private caucus. We model shuttle diplomacy as a dynamic procedure where the mediator helps each party to gradually discover her costs and benefits of settlement, as well as to re-assess her bargaining position, while also proposing the terms of the deal and arranging temporary claim exchanges. The way the procedure progresses depends on the feedback the mediator receives from the parties during meetings with the parties. We show that shuttle diplomacy allows parties to always achieve an ex-post efficient and equitable (perfectly fair in the case of symmetric value distributions) final settlement. In contrast, this is not possible with a static mediation procedure.

Keywords: Bargaining; Information design; Mechanism design; Mediation; Persuasion (search for similar items in EconPapers)
JEL-codes: C72 D47 D82 D86 (search for similar items in EconPapers)
Date: 2022-01
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP16934 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Shuttle diplomacy (2024)
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:cpr:ceprdp:16934

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP16934

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().