# Mediation model: is it wrong?

From time to time it crosses my mind that the mediation model so widely used in psychology area of research is not a good model, because it 'works' when two variables are correlated.

During my mathematics studies I was taught that multicollinearity causes instability of $\breve{\beta}$ estimators, and that's the source of my confusion. If coefficients are unstable, so the whole concept is dubious. At least for me.

I even wrote to a psychologist who broadly employs and teaches this model about the collinearity and instability asking if wouldn't it be good to check VIF or something like that. He replied briefly:

One of the paradoxes of mediation analysis is that the more strongly correlated X and M, the less powerful the test on the paths from M to Y and from X to Y.

But I remained unconvinced... I know that the bootstrap is used, but I'm not sure if it addresses that (instability) issue. I'm wondering if, among you all, there are people who share the same doubts? Or is there a solution that I don't know about?