Many papers studying mediation in conflict resolution focuses on mediator characteristics as unbiased vs. biased. Some emphasize the necessity of unbiasedness, while others argue that only biased mediators can play an effective role. The opposite views in the literature stems from the nature of conflicts in question and the differences in the (un)biasedness definition. This paper investigates the need for a mediator and the role of mediator characteristics by employing the tools of game theory in a framework where the strategic interaction of two disputing parties have an impact on different issues at stake which involve conflicting or common interests. The dispute arises due to each partys incomplete information about the levels of importance privately attributed to these issues by the other. A better-informed mediator can reveal this information to enhance the chances of cooperation through costless communication, which is modeled by a cheap talk game. Our analysis suggests that for the mediator to be truthful and credible in equilibrium, she should (i) care about the outcome of the interaction, (ii) not prefer one outcome to the other by a large margin, (iii) be unbiased in the sense that she prefers mutual disagreement to the one where one side abuses the other. We also find that (un)biasedness does not matter when the mediator imposes costly carrot-stick strategies such as sanctions or incentives. We probe the plausibility of the hypotheses generated by the model with conflict resolution cases.
Key words: Mediation, cheap talk games, biased vs. unbiased. JEL Codes: C70, D82, D83. Article Language: EnglishTurkish
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