Mediation and Conflict Prevention

Abstract

Mediation is a popular process to prevent conflicts over common resources, but there is little clean insight into its effectiveness and mechanisms. Our experimental approach allows for a comprehensive analysis of third-party intervention into potential conflicts and circumvents key problems linked to the analysis of field data. A mediator who credibly threatens punishment in the case of uncooperative behavior achieves the efficient solution in most cases. Similar results are obtained even if the mediator is biased toward one party or has no incentive to intervene. When cooperation fails, communication without credible punishment threats leads to particularly low payouts for the “losing” party.

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