Inefficient Concessions and Mediation

Abstract

When two parties are engaged in conflict and each distrusts the other’s ability to pursue peace, concessions can be used to indicate an interest in making peace. However, when negotiating parties are concerned that concessions could be used against them in the future, a lack of trust can prevent optimal concessions from being made. It can also reduce the possibility of peace. We use mechanism design to explore ways in which a third party mediator can act as a guarantor that promised concessions will be delivered, thereby reducing inefficiencies and increasing the potential for peace. In this process, we open up a new rationale for mediation: to increase the inefficiency of signaling in a preliminary round of negotiations.

Kristy Buzard

Associate Professor of Economics

My current research focuses on the formation and maintenance of international trade agreements, conflict resolution, and innovation. I am particularly interested in the impact of international institutions, government structure and domestic political pressure on the possibilities for cooperation.