Mediation in Reputational Bargaining
American Economic Review · 2021 · Volume 111 · Issue 8
Abstract
Can an uninformed mediator improve outcomes in a dynamic reputational bargaining model? I show that a simple communication protocol used by professional mediators, of announcing an agreement only if both parties privately accept its terms, can increase the payoffs of rational bargainers, but only if communication is noisy: the mediator must sometimes fail to suggest a deal even when both bargainers accept it.
Keywords
Bargaining Theory, Matching Theory, Conflict, Conflict Resolution, Alliances, Revolutions, Search, Learning, Information and Knowledge, Communication, Belief, Unawareness
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