BazermanMoore

Together, these three sets of facts determine the structure of the negotiation game
(Lax & Sebenius, 1987). Negotiation analysis considers how a rational negotiator should
think about the structure of the negotiation and the other negotiator (Raiffa, 2001), as
well as the common errors that negotiators and their opponents make (Bazerman,
Curhan, & Moore, 2000; Bazerman, Curhan, Moore, & Valley, 2000; Bazerman &
Neale, 1992; Thompson, 2001).
Alternatives to a Negotiated Agreement
Before we begin any important negotiation, we should consider what we will do if we
fail to reach an agreement. That is, we must determine our Best Alternative To a Negotiated
Agreement, or BATNA (Fisher, Ury, & Patton, 1981). Why is this important?
Because the value of our BATNA provides a lower bound for determining the minimum
outcome we require of a negotiated agreement. We should prefer any negotiated
agreement that provides more value to us than our BATNA over an impasse; likewise,
we should decline any negotiated agreement that provides less than our BATNA. This
assessment logically determines the negotiator’s reservation point (also called an indifference
point)—the point at which the negotiator is indifferent between a negotiated
agreement and an impasse.
Imagine that you believe the other side has made their final offer, and all you have
to do is accept or reject it. How do you decide? The BATNA concept makes this a fairly
clear decision. If the offer is better than your BATNA, accept it. If not, reject it. Yet
many people say ‘‘no’’ to final offers that are better than their BATNAs and say ‘‘yes’’ to
offers that are worse than their BATNAs. Why? When you have failed to carefully consider
your BATNA, it is easy for emotions to hold sway.
Alternatives to agreement take a variety of forms. For example, rather than buying
a specific new car, you may decide to continue to use mass transit. Alternatively, your
BATNA may be to buy the same car from another dealership at a price that you have
been offered in writing. Notice that in the second situation, it is far easier to determine
your reservation price. However, whether you have an easy-to-assess reservation
price or whether you seem to be comparing apples and oranges, you should always
determine your BATNA and your best estimate of the value of your opponent’s
BATNA. While this analysis may be difficult, it will provide a better basis for negotiation
than your intuitive, unprepared assessments. The most fundamental leverage you
have in any negotiation is your threat to walk away. You should never enter a negotiation
without having a sense of what your BATNA is and what that means for when you
would walk away from the bargaining table.
The Interests of the Parties
A Decision-Analytic Approach to Negotiations 153
To analyze a negotiation, it is necessary to identify all of the parties’ interests—yet negotiators
often do not understand the other side’s interests. There is a difference between
the parties’ stated positions and their underlying interests. Positions are what
parties demand from the other side. Interests are the motives behind these positions.
As the following sections highlight, sometimes a focus on deeper interests can suggest
creative solutions that help each side get more of what they want.