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Shuttle diplomacy

Author

Listed:
  • Gottardi, Piero
  • Mezzetti, Claudio

Abstract

In practice mediation operates through shuttle diplomacy: the mediator goes back and forth between parties, meeting them in private. We model shuttle diplomacy as a dynamic procedure. The mediator helps each party to gradually discover (privately) her value from settlement and re-assess her bargaining position, while also proposing the terms of the deal. We show that shuttle diplomacy always allows parties to achieve an ex-post efficient final settlement. In contrast, this is not possible with a static mediation procedure. In addition, if parties have symmetric prior value distributions, shuttle diplomacy guarantees a fair split of the social value from settlement.

Suggested Citation

  • Gottardi, Piero & Mezzetti, Claudio, 2024. "Shuttle diplomacy," Journal of Economic Theory, Elsevier, vol. 216(C).
    • Handle: RePEc:eee:jetheo:v:216:y:2024:i:c:s0022053123001904
    DOI: 10.1016/j.jet.2023.105794
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Mediation; Mechanism design; Information design; Diplomacy;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law

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