Mediation, Walrasian Tâtonnement, and Negotiations as an Exchange Economy*
نویسنده
چکیده
A significant public policy trend is the increased use of alternative dispute resolution (ADR) procedures, such as mediation and arbitration, in a variety of settings. Mediation is the most utilized, yet least analyzed, of these procedures. This article proposes a general equilibrium framework to analyze mediation. Mediators function as Walrasian auctioneers by altering tradeoff among bargaining issues, thereby facilitating voluntary settlements (i.e., general equilibrium). The results include: 1) successful mediation leads to Pareto efficient settlements; 2) non-neutral mediators—those with a stake in the outcome—can manipulate outcomes by adding resources to mediation; 3) mediation Pareto dominates arbitration, in general. JEL Codes: J52, D51 JEL
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