Estimating The Zone Of Possible Agreement In An Adversarial Negotiation Means

There is therefore a possible match zone if there is an overlap between these walk-away positions. If this is not the case, it is very unlikely that the negotiations will succeed. In fact, it will only be possible if a party realizes that its BATNA is not as good as it thought, or if it decides to accept the agreement for another reason, when another option could lead to better results. (This is often the case when parties don`t explore or understand their BATNas well enough and are therefore content with less than they could have gotten elsewhere.) For example, a lender wants to borrow money at a given interest rate for a set period of time. A borrower willing to pay this rate and accept the repayment term shares a ZOPA with the lender and the two can eventually reach an agreement. In the example above, Sarah is not willing to pay more than $4500, and Paul accepts no less than $5,000 $US. Sarah may be ready to throw a few skis that she received as a gift, but never used. Paul, who wanted to use some of the money in the car to buy a few skis, agrees. Paul accepted less than his final result, because added value was added to the negotiation. Both sides “win”.

An important part of preparing for a trade is to discover your area of acceptance, for example by looking for previous offers and looking at current market prices. Of course, you will also take into account the finances you have for this purchase. It can also be helpful to guess the other person`s area. If the parties to the negotiations are unable to obtain a ZOPA, they are in a negative negotiating zone. An agreement cannot be reached in a negative negotiating zone, as the needs and wishes of all parties cannot be satisfied by an agreement concluded under these conditions. When I negotiate to buy something, there are a number of prices that I find reasonable and expect to see. If the price is lower, I will be pleasantly surprised and I think it is really cheap. Together, these two zones form the acceptance zone.

If something is evaluated in this area, it is that if I want to buy it, I will accept the price. If it is higher, I will not accept the price. As a rule, the buyer begins to offer near the lower part of his area and stops when he goes up. So the buyer and seller have both acceptance zones – one low and the other high. If they are to reach an agreement, these areas must overlap. This is the area of the agreement where the final agreement on the price (or what is negotiated) can be reached. As has been shown throughout the “Negotiation Mastery” course, a big part of the interaction during a negotiation is to shape the perception of ZOPA through conviction and other tactical measures, as this instead leads to an agreement. The “surprisingly cheap” area remains important during negotiations, because if a buyer offers something in this area, I might be wary that what he sells is less than what I really want, for example of lower quality, as in the price-quality heuristic. However, negative areas of negotiation can be overcome if the negotiating parties are willing to know each other`s wishes and needs.

. . .