Biased mediation: Selection and effectiveness

This paper presents a theory of mediator selection in conflicts that compares biased and unbiased mediation. We characterize optimal mechanisms used by biased mediators when they are selected into mediation, and determine when and how parties in dispute accept a biased mediator in equilibrium. We find that when asymmetric information is significant, parties accept biased mediation as long as the degree of mediator bias is not too strong. Biased mediators care more about the payoffs of their favored party. Nevertheless, we find that biased mediators can be equally effective in promoting peace as the unbiased mediator. This is because biased mediators use recommendation strategies that allocate more shares of resource to their favored party while providing a higher chance of peaceful settlement to a weaker type of their disfavored party.