ZOPAs & BATNAs & WAPs Oh My!

"A "Zone of Possible Agreement" (ZOPA) exists if there is a potential agreement that would benefit both sides more than their alternative options do...

In order for disputing parties to identify the ZOPA, they must first know their alternatives, and thus their "bottom line" or "walk away position."...

Roger Fisher and William Ury introduced the concept of "BATNA" (Best Alternative To a Negotiated Agreement). This is the best course of action that a party can pursue if no agreement is reached...

BATNAs determine each side's bottom lines... So, a zone of possible agreement exists if there is an overlap between these walk away positions. If there is not, negotiation is very unlikely to succeed...

If both sides know their BATNAs and walk away positions, the parties should be able to communicate, assess proposed agreements, and eventually identify the ZOPA. However, parties often do not know their own BATNAs, and are even less likely to know the other side's BATNA. Often parties may pretend they have a better alternative than they really do, as good alternatives usually translate into more power in the negotiations..."

Read more in this essay from beyondintractability.org .