Recent negotiating successes should cause us to pause and reconsider the widespread mood of scholarly pessimism regarding the possibilities for ethnic bargaining. Such pessimism springs in part from an emphasis on the long-standing nature of group differences and the hatreds that is said to accompany these differences, and in part from the threat to moderate politics that can take place under democratic as well as authoritarian regimes. To be sure, when adversaries confront each other directly and no mediator stands between them, a shift in strategic interactions can prove difficult but not impossible. However, the structure for interethnic bargaining changes significantly when a third-party mediator intercedes and attempts to influence the adversaries to alter their perceptions on the benefits of reaching an agreement. Third-party mediation, then, is the missing variable in the traditional literature on ethnic bargaining; this missing element helps to explain an important part of the gap between the scholarly pessimism of the past and the current reality.