BATNA & ZOPA

Activate when: user says 'walk-away point', 'reservation price', 'should I take this deal', 'what's my leverage', 'they won't budge', or any salary/term-sheet/vendor/M&A negotiation where stakes are non-trivial. Do NOT activate when: the situation is a purely emotional relationship dispute with no transactional dimension; cultural context makes explicit BATNA discussion taboo.

Overview

BATNA (Best Alternative to a Negotiated Agreement) is the value of your best fallback if no deal happens — the floor below which you walk away. A negotiator without a clear BATNA negotiates from fear; with one, from position.

ZOPA (Zone of Possible Agreement) is the overlap between what each side will accept. If it exists, a deal is possible; if not, the question is structural change — not harder negotiating.

Composes with anchoring, signaling-games, repeated-games-reputation, and prisoners-dilemma.

When to Use

• Any non-trivial negotiation: term sheets, salary, partnership, M&A, vendor contracts, customer pricing
• You feel pressure to take a deal that "feels bad" — usually a sign your BATNA is weak or not modeled
• Assess whether a deal can happen before investing time in tactics

Not when: purely emotional/non-transactional disputes; cultures where direct BATNA discussion is taboo.

Coaching Novices (Adaptive Front Door)

• Engine mode: user has a concrete deal → run The Process directly.
• Coach mode: user is unfamiliar → guide step by step.

In Coach mode, respond one step at a time. Each [WAIT] is a hard stop — output only that step's question, then stop.

1. One-line: BATNA = your walk-away value; ZOPA = the range where both sides say yes.
2. Check fit: relationship-only situations → point elsewhere.
3. "What negotiation are you in right now?"

[WAIT — do not advance until user responds]

4. One question at a time: What's your BATNA? What's theirs? Where's the overlap?

[WAIT — do not advance until user responds]

5. Name the specific opening offer and walk-away point they've identified.

[WAIT — do not advance until user responds]

The Process

Step 1 — Compute your BATNA: specific alternative + dollar value + timeline + probability → risk-adjusted value. "Going elsewhere" is not a BATNA. Strengthen before negotiating (parallel processes, extended runway).

Step 2 — Set reservation & aspiration: Reservation > BATNA (with buffer). Opening offer > aspiration, but defensible.

Step 3 — Estimate their BATNA: Ask directly; research alternatives; observe behavior (patient = strong, pressured = weak). Their reservation caps your ceiling.

Step 4 — Find the ZOPA: Overlap of reservation prices. If none exists → structural move (add issues, extend time, find new counterparty). Not "negotiate harder."

Step 5 — Distribute within ZOPA: Open at your favorable boundary (anchoring). Make small concessions — don't split. Trade variables when single-issue stalls. Walk at reservation, not earlier or later.

Output: BATNA & ZOPA Analysis

markdown

# BATNA & ZOPA Analysis: <deal>
## My side:  BATNA <value> | Reservation $__ | Aspiration $__ | Opening $__
## Their side: Est. BATNA <…> | Est. reservation $__
## ZOPA: $__ to $__ | Exists? yes/no
## Strategy: [if ZOPA] open at __; walk at __; concede via __
##            [if no ZOPA] structural move: __
## Falsifier: observation that would tell me my estimates are wrong: __

→ Method in Action: Fisher and Ury, 1981 — The Harvard Negotiation Project

Pack: BATNA & ZOPA Patterns

Negotiation	Your BATNA	Their BATNA
Term sheet	Other investors / bridge / status quo	Other pipeline deals
Salary	Other offers, current job, savings runway	Next candidate, leave role open
Vendor contract	Other vendors, build in-house, defer	Other customers, lower revenue
M&A	Continue independent, alternative acquirer	Build in-house, acquire competitor

Applying It Well

• Compute BATNA before any negotiation session — mid-session computation is slow and biased
• Model their BATNA with the same rigor as your own — it sets your ceiling
• Multi-issue deals: identify what each side values most and trade across variables

→ Primary sources: references/sources.md

Common Rationalizations

[D] = designed upfront | [O] = observed in real use. [O] entries are more valuable.

Fake move	Reality
[D] "My BATNA is strong" without specifics	Where exactly, with what offer, by when? If you can't answer, BATNA is weak.
[D] No estimate of their BATNA	Their BATNA caps your aspiration — without it you over-ask or under-ask.
[D] ZOPA non-existence = "they're being difficult"	Sometimes no deal exists. Structural change, not harder negotiation.
[D] Splitting the difference	Signals you have room. Make small concessions instead.
[D] Walking at aspiration, not reservation	Walking early leaves money on the table.
[D] Staying past reservation (sunk costs)	Negotiation effort is irrelevant. If deal < BATNA, walk.
[D] Bluffing about BATNA	If discovered, credibility collapses.
→ Add [O] entries here after each real use — paste the actual failure pattern	What went wrong and why

Red Flags

• "My BATNA is going elsewhere" without specifics — No estimate of their BATNA
• Pressure to close before BATNA computation is done — ZOPA not explicitly checked
• Reservation price not pre-committed before negotiating

Verification

• BATNA: specific alternative, value, timeline, risk-adjusted
• Reservation > BATNA (with buffer); opening > aspiration
• Their BATNA estimated with reasoning; ZOPA checked
• If no ZOPA: structural move identified
• If ZOPA: opening, concession pattern, walk-point pre-committed

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