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It is such an honor to speak to you, especially since compared to the titans who have given the Schwartz Lecture in the past, I feel like an ADR manqué. I am going to proceed, nonetheless, and discuss the impact of counteroffers on negotiation. And I am going to try to convince you of four central claims:
- Legal claim: The counteroffer is governed by what I will call the "blow-up rule," which is a rare kind of double-jointed default.
- Informational claim: Offerees are the first people to know when there are gains of trade.
- Channeling claim: The blow-up rule dampens the incentive of offerees to inefficiently counter.
- Psychological claim: Rejection aversion and other behavioral "biases" tend to cause people to reject offers too often.
These counteroffer claims join together two disparate obsessions that I have with legal default rules and information forcing. The last claim even gives me a chance to indulge my penchant for why-not experimentation, where I have tried to put into practice the never-say-no attitude.
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