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Bargaining Advantage and the Veil of Ignorance

Introduction
One of the distinctive features of John Rawlss account of justice is the
idea that principles of justice can be determined by conducting the
following thought experiment: Rational, mutually disinterested parties who
represent the members of society are tasked with choosing principles of
justice. As these parties are prevented from knowing the specific features
of the members of society they represent, as well as particular features of
the society they will end up in by a thick Veil of Ignorance, Rawls proposes
that whatever these parties choose will be the principles of justice.
Rawlss argument for the Veil of Ignorance is that whatever is chosen from
a fair hypothetical choice situation is justified. The Veil is supposedly
justified because it makes the initial choice situation procedurally fair.
Rawls argues that some types of information about oneself provide
bargaining advantages in the initial choice situation, and that since these
are morally arbitrary, the advantage provided by such information is
unfair. The Veil is supposed to make the initial choice situation fair, by
preventing parties from using such morally irrelevant information about
the represented persons to obtain an unfair bargaining advantage over
others (Rawls 2001, p87; Freeman 2007, pp. 342-343).
The above argument has met with many objections. For instance, Dworkin
(1973) and Scanlon (1982) have taken issue with the first step of the
above argument. They have argued that hypothetical agreements or
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choices lack justificatory power. Stark (2000) has rebutted their argument
by arguing that since it is appropriate to place certain constraints on
reasoning about justice, hypothetical agreements justify principles of
justice if and only if the features of the choice situation model those
constraints.
Gauthier took aim at a different aspect of the argument. While he agreed
with Rawls and commentators like Freeman that the party having
knowledge of the person she represents can provide a bargaining
advantage, he argued that such a natural advantage is not unfair
(Gauthier 1978) and need not be corrected for. Rawls, however, has a
ready reply to this. Rawls contends that it was not a distribution of natural
assets which was unfair, but how the fundamental social institutions
respond to that distribution that was fair or unfair (Rawls 1997, p. 87). The
moral arbitrariness of the distribution of natural assets means that there is
no reason to morally privilege a situation where advantages accrue to
those with assets.
Indeed there may be other reasons why a choice situation in which
everyone has equal bargaining power is appropriate when determining the
principles of justice. In this paper, I bracket these issues and instead
examine whether the party having knowledge of the person she
represents confers a bargaining advantage. I will show that doing so does
not. If my argument is successful, then this will moot the question as to
whether it is appropriate to equalise bargaining power by imposing a Veil
of Ignorance.
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The Original Position


According to Rawls, principles of justice are principles that ought to
regulate the fundamental social institutions of society. Rawls proposes a
thought experiment where the results of a hypothetical agreement in a
suitably described choice situation called the Original Position are the
principles of justice whatever those results turn out to be.
The Original Position is a choice situation with at least three major
components. The first component is a set of choosing parties who
represent the members of society. In the Original Position, the parties are
characterised as rational and mutually disinterested. That is to say, that
they will, subject to constraints, reject a given set of principles so long as
there is another they prefer more. They do not care one way or another
how well other parties do with respect to their respective preference
orderings.
The second part of the Original Position is the fundamental or highest
order interests of the member of society that the party. The highest order
interests of a person are characterised as consisting of pursuing that
persons conception of the good and exercising and developing that
persons two moral powers (Freeman 2007, p297): namely, the capacity
for a conception of the good and that for a sense of justice. The capacity
for a conception of the good, according to Rawls, consists of the capacity
to formulate the means to pursue ones final ends as well as the capacity
to assess and revise those final ends. The capacity for a sense of justice
consists of the normally effective desire to comply with the duties and
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burdens required by the principles of justice. The parties order their


preferences for conceptions with reference to the extent to which their
clients can successfully pursue their highest order interests. The account
of the highest order interests is supposed to ground valid claims1. By this,
I also mean that any claims that are based on ends not regulated by the
account of the highest order interest lack moral weight. Only if the highest
order interests account for all relevant moral considerations in this way
can it be that a choice situation in which parties order their preferences as
earlier described will yield the principles of justice, whatever those
principles may be.
The third major feature of the Original Position is the Veil of Ignorance. The
Veil of Ignorance blocks certain sorts of information about the persons
they represent and the society they will live in from the parties. The Veil
blocks information about the identity of the person being represented as
well as personal particulars like the ethnicity, religious affiliation,
conception of the good and talents that the person has. The Veil also
blocks various markers like of social position like how much wealth and
power that person enjoys in any given society. Since Rawls conceives of
the Veil as thick, it also hides specific information about the society. This
includes demographic information which will reveal the likelihood that a

1 Rawls conceives of the members of society making claims against


the fundamental social institutions. A claim is valid just in case it
carries moral weight. That is to say a claim is valid if and only if
there is some prima facie moral reason to prefer a basic structure in
which said claim is successful.
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given person has a particular characteristic as well as the particular


historical circumstances people will find themselves in.

Rawlss Argument from fairness


In this paper, I will be examining Rawlss main argument for the Veil of
Ignorance and will show that the argument is not successful. The key
motivating idea behind the Veil of Ignorance is that the principles that are
chosen via a fair procedure will be just. This would be because a fair
procedure balances each persons fundamental interests against one
another fairly, and thus affords each person their due concern. Crucially, if
the initial choice situation without the veil were unfair, then there would
be no guarantee that the principles thus chosen would be just. One key
concern is that a relative bargaining advantage possessed by some
parties makes a bargaining situation unfair. Thus, if the some parties in
the initial choice situation without the Veil had a bargaining advantage, it
would be unfair, and any principles agreed to in such a situation would
arbitrarily favour the interests of those so advantaged. The Veil of
Ignorance is thus supposed to be justified because it eliminates bargaining
advantages stemming from knowledge of ones own preferences, talents
and position in society. In this paper, I will argue that even without the
Veil, no party has a bargaining advantage over another.

Bargaining Advantage
In order to show that there is no bargaining advantage, I will provide a
definition of a bargaining advantage and provide an analysis of what is
involved in one party having a bargaining advantage over another. One
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intuitive definition of a bargaining advantage is a difference in bargaining


power.
Bargaining Advantage: A person A has a bargaining advantage
over another B, if and only if, A has more bargaining power
than B.
One way of explicating bargaining power is by cashing it out in terms of
the effect it has on the outcome of the bargain: Bargaining power, all else
equal, allows a person to get his way (Weber 1915, p152; Dahl 1957,
pp202-203). This captures the intuition that unequal bargaining power can
force the disadvantaged party to accept an option that would otherwise
be unacceptable to that person. In fact, since there seems to be no other
reason for a person to accept the unacceptable, if a person agreed to
terms that he would not have originally found acceptable while the other
parties did not, he must have had less bargaining power than them.
Showing that there would be no difference in principles chosen even when
there is no Veil should be sufficient to establish that the Veil is not
necessary in order to eliminate bargaining advantages. However, I will not
address this question in this paper. Instead, I will focus on some features
of bargaining situations which are determinants of bargaining advantage
and show that in the initial choice situation without the Veil, the
configuration of those features does not confer a bargaining advantage.
As mentioned earlier, the Veil of Ignorance blocks information about the
parties preferences, wealth and other markers of social position. It also
blocks information about what fraction of society possesses those
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characteristics. This raises two concerns pertaining to bargaining power.


The first concern is that if the party is aware of the various markers of
social position, he would strongly prefer those conceptions that
advantaged him greatly even at the expense of the less fortunate. The
party would then be unwilling to compromise and agree to a lesser but
fairer share. This could result in that party getting his way more often than
the other. This would presumably be an indication of a bargaining
advantage. Alternatively, if all parties were so intransigent, they may not
end up agreeing to any conception of justice. The Veil of Ignorance is thus
aimed at preventing these outcomes. However, it is unclear if this
particular concern is one that pertains to having a bargaining advantage.
After all, it seems plausible that there could be a bargaining situation in
which the parties of equal bargaining power have different preferred
outcomes, but one party desires his favoured option more strongly than
the other party does hers. Let me illustrate with the following example:
John and Mary are both shopping for tomatoes and they both come across
the last undamaged tomato in the supermarket. They both need that
tomato for the recipe that they plan to cook. If neither of them gets the
tomato they will both be equally badly off. They have the option of
bargaining with each other for the tomato. If neither of them wishes to
bargain, they will fight over the tomato, damage it and neither of them
will receive the tomato. They both have more than adequate resources to
bring to bear in bargaining for the tomato. It is also the case that there is
no other unclaimed undamaged tomato in the vicinity. It is the case that
Mary likes tomatoes more than John. Mary, per the above hypothesis will
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be more intransigent than John and thus more likely to get her way when
they bargain. Yet, it would be counterintuitive to suppose that Mary had
more bargaining power than John just because she desired the tomato
more than John. Assuming that my intuitions about bargaining power are
widely shared, bargaining power is not the only factor which affects the
likelihood of getting ones way in a bargain even if it is sufficient to
increasing the likelihood of such happening, all other factors being equal,.
Thus, even if knowing ones own position made it such that some parties
were more likely to get their preferred option, this does not occur in a way
which confers a bargaining advantage on any party.
The second concern is that if there are many more members of society
who have a particular conception of the good or preference, parties,
knowing that they vastly outnumber people with other preferences will
allow them to force their preference onto others and perhaps end up
forcing those others to accept conceptions that are otherwise
unacceptable to them.
However, the threat of coalitions amassing bargaining power is misplaced
for a number of reasons. A coalition can influence an outcome if and only
if there is some mechanism by which adding more people to a given
coalition reduces the incentive to oppose the coalition or reduces the
ability of the opposition to successfully block the larger coalitions
preferences. These conditions, while being present in many normal
situations involving coalitions, are not present in the initial choice
situation.
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Indeed, even in more feudal or aristocratic systems, the ruler will have to
gain the support of nobles and land owners who are sufficiently powerful,
that they can subdue the opposing coalition by force of arms and can
force or threaten them into capitulating to terms. In this case, a larger
coalition poses a more credible threat and thus reduces the chances of
successful opposition. This decreases the expected utility of opposing that
coalition. Notice, however, that the success of that coalition depends on
the use of coercive power. The winning coalition is able to win only
because they have more coercive power than the opposition. However, in
the initial choice situation, the parties have no way of coercing one
another. Since the choice situation is purely hypothetical, there is no
possibility of a person carrying out any threat that the party representing
him made. Moreover, it would be trivially easy to simply disallow interpartite coercion.
Contrariwise, in democratic regimes, coalitions are successful because in
addition to an existing political apparatus capable of bringing to bear
coercion on others, there is an antecedent rule accepted by everyone
which gives political power to the winning coalition. However, the parties
in the Original Position (and likewise in the choice situation without the
Veil) are rational and mutually disinterested. They are not specified as
accepting any sort of majoritarian norm.
One possible reply to the above is that the parties will adopt a
majoritarian procedural norm in order to avoid entering the nonagreement situation. However, this cannot be the case. Without the Veil,
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each party knows all the other parties preferences and is thus able to
calculate the outcome of any majoritarian procedure. Thus, a given
majoritarian procedure would be acceptable to a given party only if the
outcome of that procedure was antecedently acceptable to that party.
However, if that outcome was antecedently acceptable, then the only
reason the party could be worried about the lack of agreement is if there
were other parties who would not accept that conception. However, if
other parties would not accept that conception, they would not accept the
procedure that would necessarily lead to the selection of that conception.
In order for all parties to accept the procedure, they would all have to
antecedently accept the conception that the procedure inevitably led to. If
they all accepted that conception, then they would not be concerned that
no conception could be agreed to, since they knew that there was a
conception that everyone accepted. Therefore, there would be no need to
adopt the majoritarian procedure.
Are there any other factors that would affect bargaining advantage?
According to Trebilcock,
The real measure of market power is not whether a supplier
presents his terms on a take-it-or-leave basis but whether the
consumer, if he decides to leave it has available to him a
workably competitive range of alternative sources of supply.
(Trebilcock 1976, pp364-365)
This picks out the central determinant of bargaining power: The best
alternative to negotiated agreement (BATNA). According to Fisher, Ury and
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Patton, the better a persons BATNA, the better her negotiating power. The
reason for this advantage is that this power depends on how attractive the
option of not reaching an agreement is to each party in a bargain (Fisher
et al 1991, p. 52).
There are two significant ways in which a difference in BATNA can confer a
bargaining advantage. The first pertains to the availability of alternative
agreements and the second pertains to the share of goods a person has or
can expect to have if the deal falls through.
The first aspect is ordinarily understood to be the primary component of
BATNA. If a person has many other alternative opportunities to bargain,
then he has little incentive to accept a bad deal offered by any one party.
To take one extreme example, suppose that in a given town there is only
one employer but many prospective employees. In this situation, said
employer has one job opening. The prospective employees are at the
mercy of the sole employer because the employer only needs to make an
offer good enough to attract a small percentage of the candidates. His
offer can therefore be bad enough that most people would not ordinarily
accept it. However, if the prospective employees needed a job, they would
have to accept whatever offer they got and in addition refrain from
insisting on favourable terms for themselves.
However, the description of the initial choice situation straightforwardly
precludes any differences in BATNA due to one party having more
opportunities to bargain than another. Since the initial agreement must be
made with all the available parties, there is no set of possible parties who
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are not part of the current agreement and who could be available for
forming an alternative agreement with. Even if the parties could try again
if they do not come to an agreement the first time, all the parties have the
same number of attempts. Moreover, it is not clear if additional attempts
could count as genuine alternatives since the parties involved would be
the same. Even if this could be considered a genuine alternative, all
parties have the same number of alternatives. The expected utility of the
BATNA that could accrue due to availability of alternatives is the same for
everyone.
As a consequence, another aspect of BATNA plays a larger role in
generating bargaining power in the initial choice situation. This aspect
pertains to the amount of resources a person has if no agreement is
made. As an illustration: Consider the case where a rich music production
executive is making a deal with a poor, starving unknown musician over
royalties. The executive, in virtue of the wealth that he can fall back on, is
less willing, all else equal, to revise the offer he makes to one that is more
favourable. The musician, on the other hand, would be less willing to hold
out. His resources can only stretch for so long and since his current
standard of living is so poor, he has a greater incentive to alleviate that
condition to any degree. This would include accepting a deal which would
raise his standard of living by some significant amount but which would
end up very nearly enslaving him.
In the initial choice situation, this is translated as the outcome that the
parties can expect if they fail to come to an agreement. If, given a correct
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description of the consequences of not coming to an agreement, all


parties have the same utility under said description, this aspect of BATNA
can be said to be equalised for them.
One anticipated objection to the argument I am making here is that the
agreement in the initial choice situation is not a bargain in the ordinary
sense. Correspondingly, the sense in which parties in a choice situation
without the Veil would have a bargaining advantage is not the ordinary
one either. However, this objection is mistaken because it too undermines
Rawlss argument for the Veil of Ignorance. The intuitive connection
between procedural fairness and a lack of bargaining advantage rests on
the ordinary understanding of the concept. If the Veil is required in order
to prevent some other thing which is not what we would normally
understand as a bargaining advantage but is merely termed so, it is not
clear that a choice situation with that thing is not procedurally fair. The
strength of Rawlss argument rests on the intuitive connection between
fairness and our ordinary understanding of bargaining advantages.
Rawlsians cannot have it both ways. Either there is a commonsense
intuition about fairness and bargaining advantage that we all share and
which we can use to ground our theorising about justice, or our intuitions
about fairness and bargaining advantages are irrelevant. If the former,
Rawlss argument would be unsuccessful since there is no bargaining
advantage even without the Veil. If the latter, then all this talk about
fairness and bargaining advantages is severely misleading at best and
incoherent at worst.

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Best Alternative To Negotiated Agreement


As mentioned earlier, in order to show that the BATNA is the same for all
parties, I must specify some appropriate description of the consequences
for the people the parties represent should they fail to come to an
agreement.
While Rawls states that the parties are motivated to agree on a set of
principles of justice, Rawls says little about the significance of nonagreement in the initial choice situation. One interpretation of this is that
it is not possible for the parties to fail to agree on a set of principles. Thus,
there need not be any description of the consequences of failing to agree.
However, this cannot be the case. It is clearly conceivable that parties in
the Original Position may reject all of the options available to them. In
fact, this would happen if all available options treated at least one
representative person unacceptably badly. Since it is conceivable that
parties in the Original Position would not choose any conception of justice,
it is logically possible that no conception of justice would be agreed to.
Therefore, it is the case that a conception of justice would be agreed to in
the Original Position only if all parties preferred that conception to not
agreeing to any conception of justice. This in turn could only happen if the
utility of agreeing to that conception was larger than the utility of not
coming to any agreement. It is also the case that there can only be a
utility value for not coming to an agreement if there was some definite
description of the non-agreement point, that is, the consequences the
parties may face if they fail to make an agreement.

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One possible description of the non-agreement point that is relevant to


the justification of the Veil is the status quo. In the status quo option, if no
agreement is made in the initial choice situation, everyone gets what they
currently have. It is the possibility of the status quo option that seems to
give us reason to favour a Veil of Ignorance that hides information about
peoples circumstances. The disquiet here is that parties representing
those who are currently well off have little or no incentive to agree to a
conception of justice which might require them to give up some of their
wealth. This would cause them to be intransigent in making reasonable
concessions to those who are unfairly disadvantaged by the current rules.
The Veil of Ignorance hides information about ones current social position
and thus increases the incentive for the parties to negotiate. Failure to
come to an agreement might cause a party to end up in an unacceptably
bad position.
Thus, if the status quo is the appropriate description of the non-agreement
point, without the Veil, the parties BATNA will be different. In order to
show that the BATNA is the same, I will show that the status quo is not an
appropriate description of the non-agreement point. In order to do this, I
will appeal to the justification of using hypothetical choice situations in
general. If descriptions like the status quo are ruled out by considerations
that justify hypothetical agreement arguments more generally, then such
descriptions of the non-agreement point are not justified.
What justifies a hypothetical agreement is its modelling of the reasons
people bring to bear when accepting or rejecting a conception of justice.
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The hypothetical agreement would model those reasons poorly if the


parties could come to an agreement even if no principles were acceptable
to all free and equal persons in a pluralistic society. In such a case, the
fact that some principles are agreed to in the hypothetical choice situation
does not tell us if any principles, and if so which ones, are acceptable to
all free and equal persons in a pluralistic society. The principles chosen in
an initial choice situation would be the principles of justice whatever they
turned out to be, if and only if, the set up of the initial choice situation was
a reformulation of an argument for those principles.
If the initial choice situation is indeed such a reformulation, then, since the
principles chosen would be a function of the extent to which people can
successfully pursue their highest order interests, the successful pursuit of
said interests can be said to stand as reasons in favour of a given
conception of justice. In fact, the initial choice situation could not be
justified unless the highest order interests were all (and the only reasons)
in favour of a given conception of justice. Moreover, the choice situation
can count as a reformulation of the argument, if and only if, the strength
of the preference a party had for a given conception of justice was
proportional to the reasons pertaining to the person represented by a
party, on net, in favour of a conception of justice.
Given the way I have spelled out what a persons reasons for a conception
of justice are, those reasons can be equated with the extent to which she
could successfully pursue her highest order interests under that
conception. A person who has a lot of her highest order interests fulfilled
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under a conception of justice has, all else equal, a lot of reasons for that
conception of justice. A conception of justice thus consists of terms of
cooperation which provide some payoff in terms of the fulfilment of a
persons highest order interests. It would be inappropriate to claim that a
person had reason to engage in a given scheme of social cooperation if
her payoff under that scheme was no higher than her payoff if no social
cooperation had taken place, given that these gains form the basis for
engaging in such social cooperation. Where there is no gain relative to
what one could get on ones own, there is no reason to engage in social
cooperation. The reasons one has for that conception are thus the payoff
she gets under that conception less the payoff she would get when there
is no social cooperation.
In a bargaining situation, if the BATNA exceeds a given option, that party
will not agree to that option since walking away is preferable to agreeing.
This makes it the case that the strength of the preference for an option
can be nothing other than the difference in payoffs between agreeing to
that option and not agreeing to anything. If the strength of a persons
reasons for a conception is to be proportional to the strength of the
corresponding parties preference for that option, a persons gains from
social cooperation must be made proportional to the strength of her
partys preference. This can only happen if the consequence the parties
must face when they fail to agree is the situation where there is no social
cooperation. If on the other hand, the non-agreement point was the status
quo, the strength of the preference for a conception would be proportional
to the strength of the reasons for that conception less the strength of the
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reasons for the status quo. Since the status quo can exhibit at least some
degree of morally appropriate social cooperation, the strength of the
preference for that conception would not be proportional to the strength
of the reasons. This disqualifies the status quo as well as any other
description which involves some amount of social cooperation from being
the description of the non-agreement point.
This complete absence of social cooperation and institutions is akin to
Hobbes state of nature where there is a perpetual war of all against all.
The key point in evaluating this counterfactual is to imagine people
behaving as if they were not motivated to behave in ways that was
required by a conception of justice. The idea is that people are ordinarily
motivated by personal affection and a sense of morality to act in ways
that conform to most reasonable accounts of justice. If we are to evaluate
the extent to which a given set of moral rules contributes to a persons
highest order interests, the relevant contrast should be with a situation
where people are not ordinarily motivated to act as if they are constrained
by morality.
It seems to be a home truth that most if not all of the advantages we have
in life are the product of ours and other peoples developed talents.
Developing our talents requires, at the minimum, non-interference and in
at least some cases positive assistance from others. For instance,
accumulating wealth requires cooperation with others for extended
periods of time. If one wishes to sell some widget that she has made, she
requires other people to honour their agreement to pay for the widget. In
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order for other people to be willing to purchase the widget and not merely
take it by force, they require that the seller honour the agreement to hand
over the product once she has been paid. All these require norms, which
as stipulated, people lack the effective desire to abide by. Since there are
no norms regulating the conduct between persons, no one can expect
non-interference let alone positive assistance from others. Even the family
and clan cannot be relied upon. The family and clan are basic social
institutions which impose duties on its members. In the state of nature, it
is stipulated that people lack the effective motivation to perform such
duties. This makes long term planning as well as the development of ones
latent talents impossible. Hence, everyone is unacceptably badly off.
There might be some differences between people who are differently
capable of being self sufficient. However, these differences are so small
compared to what can be gained by social cooperation as to be negligible.
When this is the case, everyones BATNA is the same.

Conclusion
I have thus shown that there is no difference in BATNA between the
parties even in the choice situation without the Veil. The above account
should clarify some of the ways in which knowledge of ones position does
not confer a bargaining advantage. If it turns out that there is no
mechanism by which knowledge of ones position confers a bargaining
advantage in the initial choice situation, then the Veil would not be
necessary to eliminate bargaining advantages. Even if other arguments
for the Veil of Ignorance are successful, the above exercise serves to clear

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away one of those which are not. This would cut away some of the
theoretical bloat in Rawlss theory even if it leaves untouched some of its
more important conclusions. This latter goal is important if we think that
we should not just believe things which are justified, but believe them
based on the reasons that justify them and not for any other ones.

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