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Jeremy Bertomeu and Hamid Beladi
''Mediator learning and dowry determination in an arranged marriage setting''
( 2007, Vol. 15 No.12 )
Recently, Batabyal (2005) has analyzed a game model of dowry determination in which a mediator plays a key role. Batabyal's analysis shows that the equilibrium dowry offers from the bride and the groom optimally trade off the desire to make an assertive offer with the likelihood that this offer will be selected by the mediator. We extend the Batabyal (2005) analysis by studying the impact that learning—about the circumstances of a prospective marriage—by the mediator has on the tripartite interaction between the bride, the groom, and the mediator. Specifically, we first determine the optimal dowry offers from the bride and the groom in a separating perfect Bayesian equilibrium. Next, we show that the mediator perfectly infers the private information of the two parties from their dowry offers and that he then uses this information in part to select his preferred dowry offer.
JEL: O1 - Economic Development: General
D8 - Information, Knowledge, and Uncertainty: General
Manuscript Received : Jun 15 2007 Manuscript Accepted : Jul 20 2007

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