Before the start of a negotiation, the negotiating parties may try to manipulate its outcome by making socially-wasteful investments, such as purchasing weapons or asking for legal opinions. We study the problem of a benevolent mediator who controls the bargaining protocol of the negotiation and wishes to minimize pre-negotiation wasteful investments. We derive the efficient bargaining protocol under different specifications of the information available to the mediator. Under some conditions the mediator will choose a protocol that benefits the strongest player. We therefore highlight a potential conflict between fairness and efficiency arising in negotiations.
Benevolent mediation in the shadow of conflict
Canidio Andrea;
2018-01-01
Abstract
Before the start of a negotiation, the negotiating parties may try to manipulate its outcome by making socially-wasteful investments, such as purchasing weapons or asking for legal opinions. We study the problem of a benevolent mediator who controls the bargaining protocol of the negotiation and wishes to minimize pre-negotiation wasteful investments. We derive the efficient bargaining protocol under different specifications of the information available to the mediator. Under some conditions the mediator will choose a protocol that benefits the strongest player. We therefore highlight a potential conflict between fairness and efficiency arising in negotiations.File | Dimensione | Formato | |
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