
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 rev-elation 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.
Item Type: | Paper |
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Keywords: | Contracting, Non-Commitment, Revelation Principle |
Faculties: | Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems > A1 - Allokationsmechanismen in Organisationen und Märkten |
Subjects: | 300 Social sciences > 330 Economics |
JEL Classification: | D82 |
URN: | urn:nbn:de:bvb:19-epub-13524-0 |
Language: | English |
Item ID: | 13524 |
Date Deposited: | 10. Jul 2012, 13:11 |
Last Modified: | 04. Nov 2020, 12:54 |