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...