Negotiation Strategy Calculator
Prepare for your negotiation by defining your key positions and estimating those of your counterparty. This tool helps identify your bargaining range and the Zone of Possible Agreement (ZOPA).
Enter your negotiation parameters and click “Analyze Positions”
Understanding Your Negotiation Landscape
Effective negotiation starts with understanding your own position and, as much as possible, that of the other party. This calculator focuses on key concepts:
- Target Price/Value: This is your most optimistic, yet realistic, goal. What outcome would make you very satisfied?
- Walk-Away Price/Value (Reservation Point): This is your absolute bottom line. Beyond this point, you will not agree and will pursue your BATNA. If buying, it’s the highest price you’ll pay. If selling, it’s the lowest price you’ll accept.
- BATNA (Best Alternative To a Negotiated Agreement): What will you do if this negotiation fails? Knowing your BATNA gives you power. If its value is better than a potential deal, you walk away.
- Counterparty’s Positions: Estimating their Target and Walk-Away points helps you anticipate their moves and identify potential overlap.
- Bargaining Range: The space between your Walk-Away Price and your Target Price. You aim to settle as close to your Target as possible within this range.
- ZOPA (Zone of Possible Agreement): This is the overlap (if any) between your bargaining range and the counterparty’s estimated bargaining range. If a ZOPA exists, there’s a theoretical space where an agreement can satisfy both parties.
- It’s generally the range between the buyer’s reservation price (maximum they’ll pay) and the seller’s reservation price (minimum they’ll accept).
- This calculator determines ZOPA by finding the overlap between the [min, max] of your (Target, Walk-Away) and the [min, max] of the counterparty’s (Target, Walk-Away). Interpretation requires context (are you buying or selling?).
Using the Results: If a positive ZOPA is identified, it suggests a deal is possible. Your strategy should be to anchor discussions favorably and explore options within this zone. If no ZOPA is apparent, or it’s negative, you may need to find ways to create value, adjust expectations, or be prepared to walk away and implement your BATNA.