We study the reasons and conditions under which mediation is beneficial when a principal needs information from an agent to implement an action. Assuming a strong form of limited commitment, the principal may employ a mediator who gathers information and makes non--binding proposals. We show...

This paper offers a new type of explanation for economic institutions as playing the role of mediators in the sense of Myerson (1985) to facilitate communication in contracting settings with ex ante asymmetric information and limited commitment. It derives necessary and sufficient conditions...

We study the reasons and conditions under which mediation is beneficial when a principal needs information from an agent to implement an action. Assuming a strong form of limited commitment, the principal may employ a mediator who gathers information and makes nonbinding proposals. We show that...

We study the reasons and conditions under which mediation is beneficial when a principal needs information from an agent to implement an action. Assuming a strong form of limited commitment, the principal may employ a mediator who gathers information and makes non-binding proposals. We show that...

Access to short-term credit is an important source od liquidity for firms. This article shows that the usual asymmetric information problem in credit markets can result in an oversupply of trade credits, eventually leading to overproduction of liquidity and underinvestment in log-term projects....