Best Alternative to a Negotiated Agreement (BATNA)

Original Source:  Beyond Intractability

“What BATNAs Are

BATNA is a term coined by Roger Fisher and William Ury in their 1981 bestseller, Getting to Yes: Negotiating Without Giving In.[1] It stands for “Best  ALTERNATIVE TO  a negotiated agreement.” Said another way, it is the best you can do if the other person refuses to negotiate with you–if they tell you to “go jump in a lake!” or “Get lost!”  So it is not necessarily your ideal outcome–unless your ideal outcome is something you can get without the cooperation of the other person. It is the best you can do WITHOUT THEM.

BATNAs are critical to negotiation because you cannot make a wise decision about whether to accept a negotiated agreement unless you know what your alternatives are. If you are offered a used car for $7,500, but there’s an even better one at another dealer for $6,500–the $6,500 car is your BATNA.  Another term for the same thing is your “walk away point.”  If the seller doesn’t drop her price below $6,500, you will WALK AWAY and buy the other car. 

Your BATNA “is the only standard which can protect you both from accepting terms that are too unfavorable and from rejecting terms it would be in your interest to accept.”[2] In the simplest terms, if the proposed agreement is better than your BATNA, then you should accept it. If the agreement is not better than your BATNA, then you should reopen negotiations. If you cannot improve the agreement, then you should at least consider withdrawing from the negotiations and pursuing your alternative (though the relational costs of doing that must be considered as well).

Having a good BATNA increases your negotiating power. If you know you have a good alternative, you do not need to concede as much, because you don’t care as much if you get a deal. You can also push the other side harder.   If your options are slim or non existent, the other person can make increasing demands, and you’ll likely decide to accept them–because you don’t have a better option, no matter how unattractive the one on the table is becoming. Therefore, it is important to improve your BATNA whenever possible.  If you have a strong one, it is worth revealing it to your opponent.  If you have a weak one, however, it is better to keep that detail hidden…”

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