Draft:Steps in determining BATNA
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Introduction:
[edit]The Best Alternative To a Negotiated Agreement (BATNA) is a concept in negotiation theory that represents the most advantageous course of action a party can take if negotiations fail. The concept of BATNA emerged from the Harvard Program on Negotiation's[1](PON) work on principled negotiation theory. Fisher and Ury introduced the term in their 1981 book Getting to YES, the first in their series on negotiation theory.[2] BATNA shares conceptual similarities with the Game Theory[3]concept of a disagreement point in bargaining problems, which was pioneered by John Forbes Nash Jr. in the 1950s and later earned him the Nobel Memorial Prize in Economic Sciences.
In game theory, a Nash Equilibrium occurs when no participant can improve their outcome by changing their strategy alone, assuming other participants keep their strategies unchanged. This concept is similar to the role of BATNA in negotiations, where each party’s strategy depends on the alternatives available outside the negotiation. BATNA has since become a key concept in negotiation studies and is frequently taught alongside related concepts such as the Zone of Possible Agreement (ZOPA) and Reservation Price.[4][5]
Steps in Determining BATNA
[edit]Understanding and determining one's BATNA is a key part of negotiation preparation. It serves as a fallback option that protects negotiators from accepting unfavorable terms while simultaneously strengthening their bargaining position.[6]
Identify Possible Alternatives:
[edit]The first step before entering negotiations is that the parties involved should draw a list of all possible alternatives that are available in the event that an agreement is not reached. Identifying multiple fallback options helps to reduce the overreliance on a single outcome and establish multiple independent courses of action thereby strengthening their negotiating position. This requires documenting every viable course of action that could be pursued independently of the current negotiation.[7]
The key components of this step include thorough documentation of potential alternatives, objective analysis of each option's merits, and the development of actionable paths that do not depend on the success of the current negotiation.
Evaluate Alternatives:
[edit]Once all possible alternatives have been identifies, the next step involves evaluating each option in terms of feasibility as well as the outcomes they are likely to produce. The main aim of this exercise is to determine which alternative would be the most beneficial if the negotiation does not result in an agreement. By analyzing the advantages and disadvantages, and the potential outcome of each alternative negotiators can rank or prioritize the alternative that offers the most acceptable and realistic outcome.[8]
Determine the Best Alternative
[edit]After the evaluation process, what emerges as the most advantageous and beneficial alternative becomes the BATNA. This alternative will be the reference point against which any negotiated deal is measured. This can help negotiators by providing an objective criteria for decision-making.
Use the BATNA to guide Negotiations
[edit]During negotiations, the BATNA serves as a point of leverage for the negotiators. A strong BATNA enables the negotiators to pursue favorable terms as they are not dependent on a single outcome and enabling the pursuit of more favorable terms.[9] A weak BATNA may place one party in a position where they feel compelled to make concessions in order to reach an agreement. Understanding and strategically using BATNA ensures negotiators keep control of the negotiation process and outcomes.
The strength of a party’s BATNA significantly influences negotiation dynamics. As Leigh Thompson notes in The Mind and Heart of the Negotiator[10], negotiators with well-developed alternatives have more favorable outcomes by reducing their dependence on any single deal.
See Also
[edit]References
[edit]- ^ "History of the Harvard Negotiation Project". PON - Program on Negotiation at Harvard Law School. Retrieved 2025-04-05.
- ^ Schaerer, Michael; Loschelder, David D.; Swaab, Roderick I. (November 2016). "Bargaining zone distortion in negotiations: The elusive power of multiple alternatives". Organizational Behavior and Human Decision Processes. 137: 156–171. doi:10.1016/j.obhdp.2016.09.001.
- ^ "Law and Ethics Compiled by DENNIS J. MAZUR, MD, PhD Law and Game Theory DAU-SCHMIDT K, RASMUSEN E, et al. On game theory and the law. Law and Society. 1997;31:613-629. The authors review Baird D, Gertner R, Picker R. Game Theory and the Law. Cambridge, MA: Harvard University Press, 1994". Medical Decision Making. 19 (1): 107. January 1999. doi:10.1177/0272989x9901900118. ISSN 0272-989X.
- ^ Myerson, Roger B (1999-09-01). "Nash Equilibrium and the History of Economic Theory". Journal of Economic Literature. 37 (3): 1067–1082. doi:10.1257/jel.37.3.1067. ISSN 0022-0515.
- ^ Myerson, Roger B (1999-09-01). "Nash Equilibrium and the History of Economic Theory". Journal of Economic Literature. 37 (3): 1067–1082. doi:10.1257/jel.37.3.1067. ISSN 0022-0515.
- ^ Umboh, Edwin (2017-12-29). "Strategi Batna (Best Alternative to a Negotiated Agreement) Dalam Mengatasi Konflik Manajemen Lingkungan di Pertambangan". Jurnal Green Growth Dan Manajemen Lingkungan. 6 (2): 1–15. doi:10.21009/jgg.062.01. ISSN 2597-8020.
- ^ Pinkley, Robin L. (June 1995). "Impact of knowledge regarding alternatives to settlement in dyadic negotiations: Whose knowledge counts?". Journal of Applied Psychology. 80 (3): 403–417. doi:10.1037/0021-9010.80.3.403. ISSN 1939-1854.
- ^ Nolan-Haley, Jacqueline M. (2008). Alternative dispute resolution in a nutshell. West nutshell series (3rd ed.). St. Paul, MN: Thomson/West. ISBN 978-0-314-18014-8.
- ^ Kim, Peter H.; Fragale, Alison R. (2005). "Choosing the Path to Bargaining Power: An Empirical Comparison of BATNAs and Contributions in Negotiation". Journal of Applied Psychology. 90 (2): 373–381. doi:10.1037/0021-9010.90.2.373. ISSN 1939-1854. PMID 15769245.
- ^ Thompson, Leigh L. (2022). The mind and heart of the negotiator: global edition (Seventh ed.). Harlow: Pearson Education. ISBN 978-1-292-39946-1.