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Mediation, Arbitration and Negotiation
| Content Provider | CiteSeerX |
|---|---|
| Author | Hörner, Johannes Pavlov, Gregory Goltsman, Maria Squintani, Francesco |
| Abstract | Abstract. We compare three common dispute resolution processes – negotiation, mediation, and arbitration – in the framework of Crawford and Sobel (1982). Under negotiation, the two parties engage in (possibly arbitrarily long) face-to-face cheap talk. Under mediation, the parties communicate with a neutral third party who makes a non-binding recommendation. Under arbitration, the two parties commit to conform to the third party recommendation. We characterize and compare the optimal mediation and arbitration procedures. Both mediators and arbitrators should optimally filter information, but mediators should also add noise to it. We find that unmediated negotiation performs as well as mediation if and only if the degree of conflict between the parties is low. 1. |
| File Format | |
| Publisher Institution | Journal of Economic Theory, July 2009 |
| Access Restriction | Open |
| Subject Keyword | Neutral Third Party Optimal Mediation Third Party Recommendation Common Dispute Resolution Arbitration Procedure Face-to-face Cheap Talk Unmediated Negotiation Performs Non-binding Recommendation |
| Content Type | Text |
| Resource Type | Article |
