Maria Goltsman

Mediation, arbitration and negotiation

We compare three common dispute resolution processes – negotiation, mediation, and arbitration – in the framework of Crawford and Sobel [V. Crawford, J. Sobel, Strategic information transmission, Econometrica 50 (6) (1982) 1431–1451]. Under negotiation, the two parties engage in (possibly arbitrarily long) face-to-face cheap talk. Under mediation, the parties communicate with a neutral third party who makes a non-binding recommendation. Under arbitration, the two parties commit to conform to the third party recommendation. We characterize and compare the optimal mediation and arbitration procedures. Both mediators and arbitrators should optimally filter information, but mediators should also add noise to it. We find that unmediated negotiation performs as well as mediation if and only if the degree of conflict between the parties is low.

How to talk to multiple audiences

We analyze the performance of various communication protocols in a generalization of the Crawford-Sobel (1982) model of cheap talk that allows for multiple receivers. We find that whenever the sender can communicate informatively with both receivers by sending private messages, she can communicate informatively by sending public messages. In particular, it is possible that informative communication with one or both receivers is impossible in private, but possible in public. When the sender is allowed to send both public and private messages, it is possible for the sender to combine the commitment provided by public communication with the flexibility provided by private communication and transmit more information to the receivers than under either private or public communication scenarios. When the players can communicate through a mediator and the receivers are biased in the same direction, it is optimal for the sender to communicate with the receivers through independent private noisy communication channels. It is in general optimal to take advantage of pooling the sender’s truthtelling constraints across the receivers when they are biased in the opposite directions.

Interim Performance Feedback in Multistage Tournaments: The Optimality of Partial Disclosure

Workers competing in a tournament for a prize (e.g., a promotion) often perform sequentially in multiple stages. When the firm is privately informed about the workers’ performance, it can sharpen incentives by strategically disclosing the intermediate results. But the policies that enhance final-stage effort may dampen incentives at the intermediate stage. In our model, the optimal disclosure policy has a simple form: disclose only if all workers perform poorly. This result offers a novel justification for partial disclosure in performance feedback. Also, it contrasts with the existing literature that focuses on the extreme policies of full disclosure and no disclosure.

Communication in Cournot oligopoly

This paper studies communication in a static Cournot duopoly model under the assumption that the firms have unverifiable private information about their costs. We investigate the conditions under which the firms cannot transmit any information through cheap talk, and show that when these conditions are violated, it may be possible to construct informative cheap-talk equilibria. If the firms can communicate through a third party, communication can be informative even when informative cheap talk is impossible. We exhibit a simple mediated mechanism that ensures informative communication and interim Pareto dominates the uninformative equilibrium for the firms.

On the optimality of diverse expert panels in persuasion games

We consider a persuasion game between a decision-maker and a panel of biased experts. The decision-maker prefers to take an action in [0, 1] that matches the underlying state but relies on the experts to learn the state. Each expert has his `ideal` action or `agenda` and may conceal unfavorable information. If the decision- maker can select the panel members based on their agendas, what panel would she choose? While common intuition favors diverse panel (as experts would restrict each other`s ability to alter information), Bhattacharya and Mukherjee (2013) presents an example where a `homogeneous` panel (either all have agenda 0, or all have agenda 1) is more conducive to information revelation than a `diverse` panel (where one expert`s agenda is 0 the other`s is 1). We analyze the optimal diversity in expert panels and show that under mild conditions, a homogeneous panel is optimal when the experts observe the state independently of each other. But if the observability of the state is correlated across experts, diverse panel may be optimal. Hence, the diversity of agendas must be considered in conjunction with the diversity of information sources, and it is never optimal to seek diversity in both dimensions.