Alternative To An Agreement

With a good BATNA, you increase your bargaining power. If you know you have a good alternative, you don`t need to admit as much, because you`re not so interested when you get a deal. You can also push the other side harder. If your options are slim or non-existent, the other person can ask more and more, and you`ll probably decide to accept them – because you don`t have a better option, no matter how unattractive the person on the table becomes. It is therefore important to improve your BATNA as much as possible. If you have a strong one, it`s worth revealing it to your opponent. However, if you have a low one, it is better to keep this detail secret. Here is a process developed by Harvard Law School to develop the best alternative to a negotiated agreement: if the best alternative to Tom`s agreement is to sell the car to a car dealership that would offer him $6,000, then the two parties can agree because Tom`s reservation point would be $6,000. In the situation described above, the graph is as follows: As shown in the example above, it is important to have the best alternative to a negotiated agreement before starting negotiations. If Colin had not had a BATNA, Tom would have had more bargaining powerThe bargaining power of buyers, one of the strengths of Porters` industry analysis framework, refers to the pressure that customers/consumers can exert. Know BATNA colins is at 7500 $US, the highest price that Tom would be able to sell his car to Colin for $7,500. The appeal of EATNA often leads to a failure of last-minute negotiations, especially when many parties are involved. Disputes can negotiate for months or even years and ultimately develop an agreement that they deem acceptable to all.

But at the end of the day, all parties must carefully consider the final result and decide: «Is this better than all my alternatives?» Only if all parties say «yes» can the agreement be reached. If only one party changes its mind, the agreement can break. Thus, it is essential for the success of the negotiations that the BATNAs and EATN were developed by the negotiators Roger Fisher and William Ury of the Harvard Program on Negotiation (PON) in their series of books on negotiations with the principles that began with Getting to YES and which unknowingly developed the concept of game theory from a point of disagreement on negotiating problems developed by the Nobel laureate John Nashash. [9] [12] A Nash balance is achieved among a group of players if no player can benefit from a change in strategy, if each other player maintains his current strategy. [13] For example, Amy and Phil are in Nash Equilibrium, so Amy makes the best decision possible, taking into account Phil`s decision, and Phil makes the best decision he can make taking into account Amy`s decision.