A mechanism design and cheap talk approach to mediation
Mediation is an alternative dispute resolution (ADR) technique. If two or more parties are in disagreement, then they can take the case to a court and let the judge give the final decision. Alternatively, the disputing parties can get the help of an experienced, neutral third party (i.e., the mediator) who facilitates a negotiation and help the disagreeing parties reach an agreement short of litigation. The mediation process is private and confidential, possibly enforced by law (European Mediation Directive 2008). The rising popularity of mediation can be explained by the increasing workload of courts, by the fact that mediation is less costly than litigation, and by the desire of some control over the final decision.

This proposed project aims to make a state-of-the-art economic analysis of mediation in civil and commercial matters. The main motivation behind this project is to determine optimal strategies and methods for eliminating the inefficiencies that possibly arise in mediation practices.