Essays on Conflict Mediation
Abstract
An important barrier to conflict resolution is asymmetric information. That is adversaries have private information about their objectives, resources, and strengths during the conflict and have incentives to misrepresent this information during the negotiations. Third-party institutions, like mediators, can help adversaries to reach an agreement by making a peace proposal. In this thesis, I explore the implication of asymmetric information of players to the design of an optimal peace proposal by a mediator.
Chapter 2, co-authored with Charles Zheng, studies a problem of conflict mediation where a mediator proposes a split of a good between two ex-ante identical contestants thereby preempting a conflict if and only if both accept the proposal. A contestant worries that accepting the proposal may signal weakness that may be exploited in the event of conflict. Thus, when conflict cannot be fully preempted, the socially optimal proposal offers to one of the contestants a minimally larger share of the good than what it offers to the other party so that the former contestant always accepts it without fearing any part of its private information being revealed.
Chapter 3 examines the participation decisions of the players in a mediation process. The action of participating in the mediation conveys information to the opponent. The mediator wants to minimize the probability of conflict subject to incentive compatibility and full participation constraint. I find that despite ex-ante identical players, a certain class of biased proposals augmented by a randomization device, that incentivizes the favored player to always accept, satisfy full participation. The equal proposal cannot satisfy full participation even with randomization. These results are true when the type distribution is binary or a continuum of types.
Chapter 4 studies a conflict model where adversaries can renege on an accepted agreement. A mediator whose objective is to maximize welfare subject to renege-proof constraint proposes a peaceful split of a contested prize between two players. Despite ex-ante identical players, the renege-proof optimal proposal is a biased proposal that the favored player always accepts. This proposal is even more biased than the lopsided proposal that maximizes welfare when players have full commitment.