Colin needs a car and negotiates with Tom to buy his car. Tom offers to sell his car to Colin for $10, 000. Colin searches Craigslist and finds a similar car to which he attributes a value of 7,500 dollars. Colin`s BATNA costs $7,500 — if Tom doesn`t offer a price of less than $7,500, Colin will consider his best alternative to a negotiated contract. Colin is willing to pay up to 7,500 $US for the car, but ideally he would only pay $5,000. The relevant information is illustrated below: if the conditions that the two parties are prepared to overlap, there would be a positive negotiating area. That is, the conditions that the buyer has agreed to clearly accept with the conditions that the seller is willing to accept. The nature of ZOPA depends on the nature of the negotiations. [3] In a (competitive) negotiation where participants try to share a „solid cake,“ it is more difficult to find solutions acceptable to both parties because both parties want to claim the cake as much as possible. Distribution negotiations on a single topic tend to be zero sums — there is a winner and a loser. There is no overlap between the parties; Therefore, no mutually beneficial agreement is possible. The best thing to do – sometimes – is to split the desired result in half.
No matter how important the negotiations are, it is never possible to reach an agreement outside the zone of a possible agreement. To reach an agreement, the parties to the negotiations must understand each other`s needs, values and interests. In the diagram above, if Tom asks for a price in excess of $7,500, Colin will take his business elsewhere. In the example, we are not supplied with Tom`s BATNA. If Tom is expected to sell his car to someone else for $8,000, it is Tom`s BATNA. In such a scenario, no deal is reached, since Tom is only willing to sell for at least $8,000, while Colin is only willing to buy for a maximum of $7,500. According to researchers Taya R. Cohen (Carnegie Mellon University), Geoffrey J. Leonardelli (University of Toronto) and Leigh Thompson (Northwestern University), negotiators can fall victim to the unification trap for a number of reasons. First, one party might be able to hide the fact that a proposed agreement would not be in the best interests of the other party.
For example, a contractor might try to overload an owner when bidding for a renovation project. To determine whether there is a positive bargaining area, each party must understand its gain or its thought price. For example, Paul sells his car and refuses to sell it for less than $5,000 (his price at worst). Sarah is interested and negotiates with Paul. If she offers him a little more than $5,000, there is a positive bargaining area, if she is not willing to pay more than $4500, there is a negative bargaining area. Leave a comment below and tell us when searching for your ZOPA in the economy helped you find an agreement.