BATNAs in Negotiation: Common Errors and Three Kinds of ‘No’

12 Pages Posted: 14 Dec 2016 Last revised: 18 Mar 2017

James K. Sebenius

HBS Negotiations, Organizations and Markets Unit

Date Written: March 9, 2017

Abstract

The best alternative to a negotiated agreement (“BATNA”) concept in negotiation has proven to be immensely useful. In tandem with its value in practice, BATNA has become a wildly successful acronym (with more than14 million Google results). But the initial characterization of this concept in Getting to Yes (Fisher, Ury, and Patton 1991) as well as many later interpretations can be problematic, limiting, and even misleading in several ways, which this article analyzes and illustrates. First, early characterizations could be easily read to imply that one’s BATNA could not itself be a negotiated agreement. Second, and more seriously, common descriptions of one’s BATNA as the “best outside option, independent of the other side” needlessly limit its applicability, especially in the many bargaining relationships in which BATNAs are inherently interdependent. Third, BATNAs are often mistakenly described mainly as “last resorts” relevant only in case of impasse or “if the other side is more powerful.” Other uses of the term “BATNA” such as the common question, “How do I negotiate if I have no BATNA?” reflect misconceptions. Although savvy negotiators and analysts generally avoid these pitfalls, the less sophisticated can go astray. This article offers robust correctives to these misimpressions and relates these to three different kinds of “no” in negotiation: a “tactical no,” a “re-set no” that permits away-from-the-table moves to favorably alter the underlying setup, and a “final no.”

Keywords: negotiation, BATNA, bargaining, zone of possible agreement, reservation price, reservation value

Suggested Citation

Sebenius, James K., BATNAs in Negotiation: Common Errors and Three Kinds of ‘No’ (March 9, 2017). Negotiation Journal, April 2017 Forthcoming; Harvard Business School NOM Unit Working Paper No. 17-055; Harvard PON Working Paper. Available at SSRN: https://ssrn.com/abstract=2884857 or http://dx.doi.org/10.2139/ssrn.2884857

James K. Sebenius (Contact Author)

HBS Negotiations, Organizations and Markets Unit ( email )

Soldiers Field
Boston, MA 02163
United States
617-495-9334 (Phone)
617-496-7379 (Fax)

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