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.     

Inferring hawks and doves from voting records

We analyze revealed policy preferences of the Monetary Policy Committee of the Bank of England. From the voting records we estimate the policy preferences with spatial models of voting. We find that internal committee members tend to hold centrist policy preferences, while more extreme policy preferences, both hawkish and dovish, are generally held by external members. An industry background is associated with more hawkish preferences.     

脱贫摘帽第三方评估的地方逆向因应实证研究——基于纳什均衡理论视角

在2016—2020五年间,832个国家级贫困县中共有780个通过第三方机构实施的专项评估而脱贫摘帽。在实地评估中,第三方评估机构与地方多元参评主体的良性互动很多。但一些地方利益主体对评估工作的逆向因应并不是一种良性互动。逆向因应是指在贫困县退出的第三方评估中,受评估地方通过虚假配合、不配合甚至人为设置障碍等方式对第三方评估工作的消极响应。这种消极响应使第三方评估机构步入“低效率陷阱”和“双重利益博弈陷阱”,也使中央通过第三方评估机构来弥补中央与地方贫困治理信息不对称的愿望落空。本文基于纳什均衡理论框架分析了第三方评估机构、地方政府、贫困户三者间的博弈,并结合某贫困县退出评估的田野调查资料,研究发现：贫困县退出评估的运行过程中,有部分贫困户和地方政府干部倾向于采用反评估的因应第三方策略。本文通过对地方政府与第三方评估机构非良性互动的原因分析,提出了“抑制地方政府逆向因应、促进正向因应”的政策建议,从而建立在乡村振兴战略下对贫困治理成效验收的有效机制。     

The effects of third party certification on voluntary self-regulation of accidents in the U.S. chemical industry

We explore whether the introduction of mandatory third party certification in 2005 under the Responsible Care program has reduced the probability and severity of accidents in participating facilities in the U.S. chemical industry. Using a sample of 10,315 observations from 1136 facilities owned by 566 RC and non-RC firms between 1996 and 2010, we estimate the average treatment effect of third party certification. We find that the difference-in-difference estimate of the average treatment effect is statistically insignificant. This result is robust to various model specifications including the potential endogeniety of third party certification due to a firm’s self-selection into RC.     

Does It Matter if You Are Observed by Others? Evidence from Donations in the Field*

We investigate whether people's donations in the field are affected by the presence of others. In the analysis, we distinguish between individuals who arrived at a national park alone and those who arrived as members of a group. We also investigated the effect of donations being made in the presence of a third party made in the presence of a third party. We find that donations are significantly more frequent for individuals who are members of a group. When a third party is present, we find that the total donations by individuals who are a part of a group are significantly higher than those of lone travelers, mainly because of the increased probability of donating.     

Efficient collusion in optimal auctions

We study collusion in an IPV auction with binary type spaces. Collusion is organized by a third party that can manipulate participation decisions. We characterize the optimal response of the seller to different threats of collusion among the bidders. We show that, contrary to the prevailing view that asymmetric information imposes transaction costs in side contracting, collusion in the optimal auction is efficient when the third party can implement monetary transfers as well as when it can implement monetary transfers and reallocations of the good. The threat of non-participation in the auction by a subset of bidders is crucial in constraining the seller's profit.     

Exit options in incomplete contracts with asymmetric information

This paper analyzes bilateral contracting in an environment with contractual incompleteness and asymmetric information. One party (the seller) makes an unverifiable quality choice and the other party (the buyer) has private information about its valuation. A simple deterministic exit option contract, which allows the buyer to refuse trade, achieves the first-best in the benchmark cases where either quality is verifiable or the buyer?s valuation is public information. But, when unverifiable and asymmetric information are combined, deterministic contracts are necessarily inefficient. The first-best can be achieved, however, through simple message games with stochastic terms of trade as off-equilibrium outcomes.     

Incentive efficient risk sharing in a settlement mechanism

The purpose of this paper is to address a question concerning risk management in continuing, multi-party, contractual, clearing and settlement arrangements through which large-value payments are typically made. We are particularly interested in the issues of incentive compatibility when a third party possesses a private information concerning the riskiness of transfers being made. If a third party possesses private information that would be of value in determining how best to settle a payment, how does the exposure of that party to the settlement risk affect the quality of information that the party chooses to provide? In this paper, we address this question by analyzing a specific class of parametric environments of a schematic, formal, model of a settlement arrangement or a payment network.     

Credence Goods,Efficient Labelling Policies,and Regulatory Enforcement

We analyse the optimality of information revelation of hidden attributes of “credence goods” via alternative labelling procedures. When consumers are heterogeneous in their willingness to pay for the hidden attribute, producers can either self-label their products, or have them certified by a third party. The government can impose self or third party labelling requirements on either the “green” or the “brown” producers. Our benchmark model develops a condition that links the optimal imposition of third party labelling to the relative market share of each type of the good under complete information. We extend our analysis to incorporate asymmetric information and cheating by the producers. When corrupt producers can affix spurious labels, the government needs to supplement the labelling policy with costly monitoring activities. We find that mandatory self-labelling schemes generally dominate mandatory third party labelling, unless the “market share effect” greatly exceeds the “incentive-to-cheat effect”.      

Applying a third party access model for China’s gas pipeline network: an independent pipeline operator and congestion rent transfer

This paper investigates third party access regulatory issues in China’s natural gas industry. We study the development of China’s gas market-oriented reform and how third party access becomes a pressing issue in that context. This paper aims to report stakeholders’ benefit and distributional effects during a hypothetical third party access process. To that end, we apply an oligopolistic equilibrium model, based on the mixed complementarity problem, to China’s gas pipeline network. We compare two scenarios: a scenario without third party access and the other scenario where an independent pipeline operator optimizes flows. This latter scenario aims to guarantee that the maximum social benefit is achieved. In addition, the latter scenario transfers the congestion rent to former integrated gas companies to compensate their actual loss control of the pipeline operation, in order to minimize the adverse distributional effects for pipeline companies. The solution of the model indicates that operational separation is feasible with Pareto improvement in China’s context. Moreover, it merits particular attention from policy makers in China that pipeline capacity scarcity should be properly evaluated and managed.     

论第三方物流中标的物风险负担

买卖合同标的物风险负担的一般规则,各国有交付主义与所有人主义两种不同的立法模式。在第三方物流中,因涉及出卖人、买受人和物流方共三方主体,其标的物的风险负担规则与一般买卖合同有所不同。在当前较为通行的第三方物流模式下,物流方多为卖方或买方的受托人,其接受或提取货物的行为是标的物风险转移的外在标志。在因物流方之过错致标的物毁损、灭失,物流方承运过程中出卖人出卖标的物以及物流方迟延履行等情况下,标的物的风险负担均有其特殊规则。     

When does coordination for free trade regimes fail?

This paper examines why the recent efforts to arrange free trade regimes have failed repeatedly focusing on the increased uncertainties in economic fundamentals and the asymmetric political economic characteristics of trading countries reflected in the hawkish trade retaliatory tendencies. We demonstrate that, under informational barriers due to economic uncertainties, a slight negative change in economic fundamentals as well as the signals about the economic fundamentals can lead to the collapse of free trade regimes. Moreover, the fear of a trading partner's deviation to protectionist policies might trigger preemptive protectionist measures resulting in a trade war when trade policies show strategic complementarity. However, a free trade regime is more likely to be sustained when it is commonly known that each country has strong symmetric retaliatory tendencies in case trade friction occurs. Nonetheless, if the asymmetry in retaliatory tendencies of trading countries increases the preemptive incentive, a free trade regime is more likely to collapse to a trade war.     

War and peace: Third-party intervention in conflict

This paper develops a simple sequential-move game to characterize the endogeneity of third-party intervention in conflict. We show how a third party's “intervention technology” interacts with the canonical “conflict technologies” of two rival parties in affecting the sub-game perfect Nash equilibrium outcome. From the perspective of deterrence strategy, we find that it is more costly for a third party to support an ally to deter a challenger from attacking (i.e., to maintain peace or acquiescence), as compared to the alternative case when the third party supports the ally to gain a disputed territory by attacking (i.e., to create war), ceteris paribus. However, an optimally intervening third party can be either “peace-making”, “peace-breaking”, or neither depending on the characteristics of the conflict and the stakes the third party holds with each of the rival parties.     

Second-party and third-party punishment in a public goods experiment

We experimentally investigate whether third-party punishment is more effective than second-party punishment to increase public goods contribution. In our experiment, third parties first played the standard public goods game and then made punishment decisions as independent bystanders. We find that third parties punished more frequently, severely and less antisocially, resulting in a higher contribution level than that driven by second-party punishment. The third party’s exaggerated emotion towards free riders is proposed to explain their superior punishment effectiveness.     

Policy coordination and the effectiveness of fiscal stimulus

This paper shows that government spending shocks in the U.S. has become ineffective due to lack of coordination between monetary and fiscal policies. Employing the post-war U.S. data, we report strong stimulus effects of fiscal policy during the pre-Volcker era, which rapidly dissipate as the sample period is shifted toward the post-Volcker era. We explain the causes of this phenomena via a sentiment channel. Employing the Survey of Professional Forecasters data, we show that forecasters tend to systematically overestimate real GDP growth in response to positive innovations in government spending when policies coordinate well with each other. On the other hand, they are likely to underestimate real GDP responses when the monetary authority maintains a hawkish stance that conflicts with the fiscal stimulus. The fiscal stimulus, under such circumstances, generates consumer pessimism, which reduces private spending and ultimately weakens the output effects of fiscal policy. We further report statistical test results that confirm our claims.     

More than words: the effects of cheap talk in a volunteer’s dilemma

We theoretically and experimentally investigate a game in which exactly one person should make a costly effort to achieve a socially efficient outcome. This setting is commonly known as the volunteer’s dilemma. We implement one-way communication by allowing one player to send a message indicating whether she intends to volunteer and investigate the message’s effects on behavior and efficiency in the subsequent game. We theoretically demonstrate that there are asymmetric mixed-strategy equilibria in the volunteer’s dilemma and argue that one of these is likely to emerge through one-way communication. The experimental data support this notion. We find that the actions of both the sender and receiver of the message are crucially affected by the cheap talk stage and that efficiency in the volunteer’s dilemma increases with one-way communication.     

WHEN YOU ASK ZEUS A FAVOR: THE THIRD PARTY'S VOICE IN A DICTATOR GAME

We conducted a laboratory experiment on a dictator game with the option for a “voice” by a third party and compared it with the dictator game with a “voice” by the recipient. Our findings are as follows. The dictators' offers in response to an aggressive voice of the recipients are significantly lower than the dictators' offers in response to the corresponding voice of the third party. The dictators' responses to an aggressive voice differentiate the effects of the recipient's voice from those of the third party's.     

Promises and lies: can observers detect deception in written messages

We design a laboratory experiment to examine predictions of trustworthiness in a novel three-person trust game. We investigate whether and why observers of the game can predict the trustworthiness of hand-written communications. Observers report their perception of the trustworthiness of messages, and make predictions about the senders’ behavior. Using observers’ decisions, we are able to classify messages as “promises” or “empty talk.” Drawing from substantial previous research, we hypothesize that certain factors influence whether a sender is likely to honor a message and/or whether an observer perceives the message as likely to behonored: the mention of money; the use of encompassing words; and message length. We find that observers have more trust in longer messages and “promises”; promises that mention money are significantly more likely to be broken; and observers trust equally in promises that do and do not mention money. Overall, observers perform slightly better than chance at predicting whether a message will be honored. We attribute this result to observers’ ability to distinguish promises from empty talk, and to trust promises more than empty talk. However, within each of these two categories, observers are unable to discern between messages that senders will honor from those that they will not.     

Signaling Corporate Social Responsibility: Third‐Party Certification versus Brands

Corporate social responsibility (CSR) is a credence attribute of products, which can be signaled either through a label certified by a third party, or via unsubstantiated claims used as part of a brand‐building strategy. We use an experimental posted‐offer market with sellers and buyers to compare the impact of these signaling strategies on market efficiency. Only third‐party certification gives rise to a separating equilibrium and an increase in CSR investments. Unsubstantiated claims can generate a halo effect on consumers, whereby the latter are nudged into paying more for the same level of CSR investments by firms.