BATNA

Best Alternative to a Negotiated Agreement (BATNA)
ByBrad Spangler June 2003

What BATNAs Are
"The reason you negotiate is to produce something better than the results you can obtain without negotiating. What are those results? What is that alternative? What is your BATNA -- your Best Alternative To a Negotiated Agreement? That is the standard against which any proposed agreement should be measured." -- Roger Fisher and William Ury
BATNA is a term coined by Roger Fisher and William Ury in their 1981 bestseller, Getting to Yes: Negotiating Without Giving In.[1] It stands for "best alternative to a negotiated agreement." BATNAs are critical to negotiation because you cannot make a wise decision about whether to accept a negotiated agreement unless you know what your alternatives are. Your BATNA "is the only standard which can protect you both from accepting terms that are too unfavorable and from rejecting terms it would be in your interest to accept."[2] In the simplest terms, if the proposed agreement is better than your BATNA, then you should accept it. If the agreement is not better than your BATNA, then you should reopen negotiations. If you cannot improve the agreement, then you should at least consider withdrawing from the negotiations and pursuing your alternative (though the costs of doing that must be considered as well).
Having a good BATNA increases your negotiating power. Therefore, it is important to improve your BATNA whenever possible. Good negotiators know when their opponent is desperate for an agreement. When that occurs, they will demand much more, knowing their opponent will have to give in. If the opponent apparently has many options outside of negotiation, however, they are likely to get many more concessions, in an effort to keep them at the negotiating table. Thus making your BATNA as strong as possible before negotiating, and then making that BATNA known to your opponent will strengthen your negotiating position.
Guy Burgess and Heidi Burgess have adapted the concept of BATNA slightly to emphasize what they call "EATNAs" estimated alternatives to a negotiated agreement" instead of "best alternatives." Even when disputants do not have good options outside of negotiations, they often think they do. (For example, both sides may think that they can prevail in a military struggle, even when one side is clearly weaker, or when the relative strengths are so balanced that the outcome is very uncertain.) Yet, perceptions are all that matter when it comes to deciding whether or not to accept an agreement. If a disputant thinks that he or she has a better option, she will, very often, pursue that option, even if it is not as good as she thinks it is.
BATNA and EATNAs also affect what William Zartman and may others have called "ripeness," the time at which a dispute is ready or "ripe" for settlement.[3] When parties have similar ideas or "congruent images" about what BATNAs exist, then the negotiation is ripe for reaching agreement. Having congruent BATNA images means that both parties have similar views of how a dispute will turn out if they do not agree, but rather pursue their other rights-based or power-based options. In this situation, it is often smarter for them to negotiate an agreement without continuing the disputing process, thus saving the transaction costs. This is what happens when disputing parties who are involved in a lawsuit settle out of court, (which happens in the U.S. about 90 percent of the time). The reason the parties settle is that their lawyers have come to an understanding of the strength of each sides' case and how likely each is to prevail in court. They then can "cut to the chase," and get to the same result much more easily and more quickly through negotiation.
On the other hand, disputants may hold "dissimilar images" about what BATNAs exist, which can lead to a stalemate or even to intractability. For example, both sides may think they can win a dispute if they decide to pursue it in court or through force. If both sides' BATNAs tell them they can pursue the conflict and win, the likely result is a power contest. If one side's BATNA is indeed much better than the other's, the side with the better BATNA is likely to prevail. If the BATNAs are about equal, however, the parties may reach a stalemate. If the conflict is costly enough, eventually the parties may come to realize that their BATNAs were not as good as they thought they were. Then the dispute will again be "ripe" for negotiation.
The allure of the EATNA often leads to last-minute breakdowns in negotiations. Disputants can negotiate for months or even years, finally developing an agreement that they think is acceptable to all. But then at the end, all the parties must take a hard look at the final outcome and decide, "is this better than all of my alternatives?" Only if all the parties say "yes," can the agreement be finalized. If just one party changes his or her mind, the agreement may well break down. Thus, knowing one's own and one's opponent's BATNAs and EATNAs is critical to successful negotiation
Additional insights into BATNA are offered by Beyond Intractability project participants.
Determining Your BATNA
BATNAs are not always readily apparent. Fisher and Ury outline a simple process for determining your BATNA:
develop a list of actions you might conceivably take if no agreement is reached;
improve some of the more promising ideas and convert them into practical options; and
select, tentatively, the one option that seems best.[4]
BATNAs may be determined for any negotiation situation, whether it be a relatively simple task such as finding a job or a complex problem such as a heated environmental conflict or a protracted ethnic conflict.
Fisher and Ury offer a job search as a basic example of how to determine a BATNA. If you do not receive an attractive job offer by the end of the month from Company X, what will you do? Inventing options is the first step to determining your BATNA. Should you take a different job? Look in another city? Go back to school? If the offer you are waiting for is in New York, but you had also considered Denver, then try to turn that other interest into a job offer there, too. With a job offer on the table in Denver, you will be better equipped to assess the New York offer when it is made. Lastly, you must choose your best alternative option in case you do not reach an agreement with the New York company. Which of your realistic options would you really want to pursue if you do not get the job offer in New York?
More complex situations require the consideration of a broader range of factors and possibilities. For example, a community discovers that its water is being polluted by the discharges of a nearby factory. Community leaders first attempt to negotiate a cleanup plan with the company, but the business refuses to voluntarily agree on a plan of action that the community is satisfied with. In such a case, what are the community's options for trying to resolve this situation?
They could possibly sue the business based on stipulations of the Clean Water Act.
They could contact the Environmental Protection Agency and see what sort of authority that agency has over such a situation.
They could lobby the state legislature to develop and implement more stringent regulations on polluting factories.
The community could wage a public education campaign and inform citizens of the problem. Such education could lead voters to support more environmentally minded candidates in the future who would support new laws to correct problems like this one.
In weighing these various alternatives to see which is "best," the community members must consider a variety of factors.
Which is most affordable and feasible?
Which will have the most impact in the shortest amount of time?
If they succeed in closing down the plant, how many people will lose their jobs?
These types of questions must be answered for each alternative before a BATNA can be determined in a complex environmental dispute such as this one.
BATNAs and the Other Side
At the same time you are determining your BATNA, you should also consider the alternatives available to the other side. Sometimes they may be overly optimistic about what their options are. The more you can learn about their options, the better prepared you will be for negotiation. You will be able to develop a more realistic view of what the outcomes may be and what offers are reasonable.
There are also a few things to keep in mind about revealing your BATNA to your adversary. Although Fisher and Ury do not advise secrecy in their discussions of BATNAs, according to McCarthy, "one should not reveal one's BATNA unless it is better than the other side thinks it is."[5] But since you may not know what the other side thinks, you could reveal more than you should. If your BATNA turns out to be worse than the opponent thinks it is, then revealing it will weaken your stance.
BATNAs and the Role of Third Parties
Third parties can help disputants accurately assess their BATNAs through reality testing and costing. In reality testing, the third party helps clarify and ground each disputing party's alternatives to agreement. S/he may do this by asking hard questions about the asserted BATNA: "How could you do that? What would the outcome be? What would the other side do? How do you know?" Or the third party may simply insert new information into the discussion...illustrating that one side's assessment of its BATNA is likely incorrect. Costing is a more general approach to the same process...it is a systematic effort to determine the costs and benefits of all options. In so doing, parties will come to understand all their alternatives. If this is done together and the parties agree on the assessment, this provides a strong basis upon which to come up with a negotiated solution that is better than both sides' alternatives. But if the sides cannot come to such an agreement, then negotiations will break down, and both parties will pursue their BATNA instead of negotiation.
[1] In 1992, Fisher and Ury published a 2nd Edition of Getting to Yes. The updated edition was edited by Bruce Patton and incorporates Fisher and Ury's responses to criticisms of their original 1981 book.
[2] Roger Fisher and William Ury. Getting to Yes: Negotiating Agreement Without Giving In. (New York: Penguin Books, 1981), 104.
[3] I William Zartman, Ripe for Resolution, (New York: Oxford, 1985/1989)
[4] Roger Fisher and William Ury. Op.cit, 108.
[5] William McCarthy, "The Role of Power and Principle in Getting to Yes," in Negotiation Theory and Practice, Eds. J. William Breslin and Jeffery Z. Rubin. (Cambridge: The Program on Negotiation at Harvard Law School, 1991), 115-122.
Use the following to cite this article:Spangler, Brad. "Best Alternative to a Negotiated Agreement (BATNA)." Beyond Intractability. Eds. Guy Burgess and Heidi Burgess. Conflict Research Consortium, University of Colorado, Boulder. Posted: June 2003 <http://www.beyondintractability.org/essay/batna/>.

Sources of Additional, In-depth Information on this Topic
Additional Explanations of the Underlying Concepts:
Online (Web) SourcesWhy Is BATNA Important?. The Negotiation Skills Company. Available at: http://www.negotiationskills.com/qaprocess12.html.This page explains what BATNA is and how it is useful in negotiating."Dealing With Impasse." , Available at: http://www.adr.af.mil/compendium/dealing.html.This article discusses two tools mediators can use to get past impasse, reality testing and BATNA.Interest, Value and the Art fo the Best Deal. The Business Times. Available at: http://www.businesstimes.com.mt/251000/focus.html.This article outlines some of the basic steps of a business negotiation, including determining BATNAs and identifying a zone of possible agreement. "Limits to Agreement: Better Alternatives." , Available at: http://www.colorado.edu/conflict/peace/problem/batna.htm.In order to know whether or not to accept a proposed settlement obtained through negotiation, you must know whether or not you can get a better outcome in some other way. This site looks at the concepts of "BATNA", which stands for Best Alternative to a Negotiated Agreement, and "EATNA's", estimated alternatives to a negotiated agreement.Reality Testing. Available at: http://www.colorado.edu/conflict/peace/treatment/realtest.htm.In deciding which conflict management strategy is most promising, parties must make assumptions about their own power, their opponent's power, and the likely outcomes of different options. It is easy to make inaccurate assessments of any of these factors, however. Often an outside party can help review the accuracy of these assumptions and help parties revise them appropriately when they are invalid. This site explains how reality testing helps parties assess their BATNA's (best alternative to a negotiated agreement). It also has links to examples of reality testing and related ADR processes.
Offline (Print) SourcesMcCarthy, William. "Bargaining Power and BATNAs." Negotiation Theory , January 1, 1991. This piece offers a critique of some of Fisher and Ury's main principles as outlined in Getting to Yes. The article mostly supports the ideas put forth in that foundational work, however, McCarthy disagrees with the limited treatment of the role of power in negotiation. He argues that the role of power is not thoroughly examined and that simple notions regarding the power of BATNAs are substituted for true analysis.Watkins, Michael, Susan Rosegrant and Shimon Peres. "BATNAs and ZOPA." In Breakthrough International Negotiation: How Great Negotiators Transformed the World's Toughest Post-Cold War Conflicts. San Francisco: Jossey-Bass Publishers, 2001. Pages: 26-35. This excerpt discusses the development of alternatives and options for settlement in negotiation. The advice provided here revolves around setting oneself up to reach the best possible outcome of a negotiation, whether it is reaching a mutually acceptable agreement or walking away all together. The authors talk about building up one's own BATNA as well as how to identify a zone of possible agreement. They explain that the nature of the ZOPA is dependent on whether the negotiation is about claiming or creating value. Click here for more info.Burgess, Heidi and Guy M. Burgess. "Definition of BATNA." In Encyclopedia of Conflict Resolution. ABC-Clio, November 1997. Pages: 33-34. This section of the Encyclopedia of Conflict Resolution provides a nice, brief overview of what BATNA means and how it applies to negotiation situations.Fisher, Roger, William L. Ury and Bruce Patton. "Original Explanation of BATNA." In Getting to Yes: Negotiating Agreement Without Giving In, 2nd Edition . Boston: Houghton Mifflin Co., April 1992. Pages: 101-111. Getting to Yes is the work in which the concept of BATNA was first introduced. Chapter Six of this edition focuses entirely on the concept of BATNAs, explaining why negotiating with a bottom line is less effective and beneficial than developing a solid BATNA. The authors explain why a good BATNA gives you power in negotiation, how to develop your BATNA, and to consider the other side's BATNA. Click here for more info.Lax, David and James Sebenius. "Power of Alternatives." In Negotiation Theory and Practice. Edited by Breslin, J. William and Jeffrey Z. Rubin, eds. Cambridge: The Program on Negotiation at Harvard Law School, January 1, 1991. While not using the actual term "BATNA", this chapter does examine how alternatives to potential negotiated agreements shape which outcome parties will settle on. The authors understand negotiation as an interactive process by which two or more parties seek to do better together, than they could do individually. Based on that definition, they argue that the measure of any negotiated agreement is whether it offers a better outcome than the course a party could take on its own. The main idea is that all potential agreements should be evaluated as competitors with other possible agreements that could help a side reach its goals. Susskind, Lawrence and Jeffrey Cruikshank. "Unassisted Negotiation." In Breaking the Impasse: Consensual Approaches to Resolving Public Disputes. New York: Basic Books, January 1, 1987. Pages: 80-136. Breaking the Impasse offers a guide to consensus building strategies for resolving public disputes. The authors describe possible obstacles to agreement and techniques for getting past those obstacles. The first few pages of the chapter entitled, "Unassisted Negotiation" present a helpful section on BATNAs and why people tend to underestimate others' BATNAs and overestimate their own. Click here for more info.
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Examples Illustrating this Topic:
Online (Web) SourcesMussweiler, Thomas, Adam Galinsky and Victoria Husted Medvec. Disconnecting Outcomes and Evaluations: The Role of Negotiator Reference Points. Social Science Research Network. Available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=304969.Two experiments explored the role of reference points in disconnecting objective and subjective utility in negotiations. Negotiators who focused on their target prices, the ideal outcome they could obtain, achieved objectively superior outcomes compared to negotiators who focused on a minimum goal, their best alternatives to the negotiation (BATNAs).Kray, Laura. Gender Stereotype Activation and Power in Mixed-Gender Negotiations. Social Science Electronic Publishing, Inc.. Available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=305011.We hypothesized that the distribution of resources in a mixed-gender negotiation would depend on the relative power advantage of men versus women, as well as the manner in which gender stereotypes were activated in the minds of negotiators. More specifically, we expected negotiators who had a strong alternative to the current negotiation (BATNA) to reap more resources than negotiators who had a weak alternative. We predicted that the effect of power (possessing a strong BATNA) would be especially important when gender stereotypes were explicitly activated compared to when they were implicitly activated because the explicit activation of gender stereotypes was expected to marshal cognitions that relate to power.
Offline (Print) SourcesUry, William L. Getting Past No: Negotiating With Difficult People. New York: Bantam Books, January 1, 1993. This book provides step by step approaches to defusing confrontation and developing creative solutions toward resolving conflicts through negotiation. In particular, it focuses on developing communication skills that facilitate cooperation. Click here for more info.