Mediation and Peace

This paper applies mechanism design to con ict resolution. We determine when and how unmediated communication and mediation reduce the ex ante probability of con ict in a game with asymmetric information. Mediation improves upon un-mediated communication when the intensity of con ict is high, or when asymmetric information is signicant. The mediator improves upon unmediated communication by not precisely reporting information to con icting parties, and precisely, by not revealing to a player with probability one that the opponent is weak. Arbitrators who can enforce settlements are no more eective than mediators who only make non-binding recommendations.