The exchange of offers at the outset of mediation often follows a familiar script: Each side begins with an extreme proposal that neither expects to form the basis for resolution. Consider a lawsuit in which the outcome is uncertain, each side having some prospect of success. According to ritual, the plaintiff offers a negligible discount from its best case, while the defendant offers to pay only a small part of its expected costs of defense. The proposals are extreme not because they are aggressive, but because they are untethered from any defensible assessment of litigation risk. The starting point is essentially a surreal demand.

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