What is a BATNA? A BATNA, or best alternative to a negotiated agreement, is the course of action you’ll take if your current negotiation ends without a deal. A strong BATNA in negotiation gives you leverage by clarifying when you’d be better off walking away than taking a deal—as long as you watch out for common BATNA mistakes.
Key Insights
- The Core Concept: Your BATNA is only as good as your BATNA analysis. It’s critical to account for factors that could skew that analysis, such as the presence of numerous alternatives.
- BATNA vs. Reservation Point: Your BATNA is your best alternative to doing a deal. Your reservation point is the least favorable deal you’d accept, based on that alternative.
- The Strategy: To avoid common BATNA mistakes, focus on your single best alternative, frame your goals in words rather than numbers, and learn the local rules before you walk away.
Table of Contents
- Why Multiple Alternatives Can Backfire
- Adapting Your BATNA to the Legal Context
- How Can You Avoid Common BATNA Mistakes?
- BATNA Mistakes at a Glance
- BATNA FAQs
- Join the Discussion
The BATNA concept, popularized by Roger Fisher, William Ury, and Bruce Patton in their book Getting to Yes, has been disseminated all over the world. Doubtless, it has helped many people avoid settling for less than what they want in their negotiations.
When you have identified your BATNA, you can compare it to the best deal you are able to negotiate. If that deal is worse than your BATNA, you should feel comfortable walking away from the table.
Yet BATNA analysis can be a complex endeavor, and we often succumb to BATNA mistakes. Here’s how to avoid two of them.
Why Multiple Alternatives Can Backfire
Negotiators are often taught that the more alternatives they have to their current deal, the better their bargaining position. If it’s good to have one strong BATNA, then it’s better to have a number of alternatives, right?
Not necessarily, according to results from a study led by researcher Michael Schaerer. The researchers found that sellers with multiple backup offers perceived the bargaining zone to be less advantageous to them and made less ambitious first offers than those who had only one alternative.
Why? Looking at a range of offers appears to alter perceptions of the bargaining zone more powerfully than looking at a single offer. For example, when a seller has a primary backup offer of $75 alongside two lower fallback offers of $70 and $65, the seller tends to view the $75 offer as a relative win and is less likely to bargain hard for an even better deal.
Surprisingly, having several strong alternatives (such as $85, $80, and $75) also leads to worse outcomes than having just a single $75 alternative, the researchers found. It seems that comparing backup offers makes the highest one feel artificially attractive. Here again, the seller becomes complacent and makes a lower opening bid than a seller with one weaker backup offer.
The lesson? If you manage to gather multiple alternatives, compare them and identify the single best option—your true BATNA. Then intentionally focus on this BATNA and put the lesser alternatives out of your mind before negotiating.
In addition, rather than evaluating your opening offer in purely numeric terms (e.g., “Should I ask for $90 or $85?”), frame your target more generally (e.g., “I will make a high opening offer”). Thinking descriptively rather than mathematically can lessen the anchoring effect of multiple alternatives, the researchers found.
The takeaway: One of the most common BATNA mistakes is letting lesser alternatives anchor you. Gather as many as you can, but negotiate with only the best one in mind.
Adapting Your BATNA to the Legal Context
We tend to assume that the BATNA concept translates equally well across borders. But in some nations, leaving a negotiation in favor of your BATNA could get you into legal hot water, Gregory J. Marsden and George J. Siedel write in the Berkeley Business Law Journal.
As they note, the BATNA concept was developed in a common-law country, the United States, where courts rely heavily on precedents. In common-law countries, parties are expected to understand the risk of not reaching agreement. If you decide not to accept a deal and turn to your BATNA, typically there’s no harm, no foul.
By comparison, many other nations have a civil-law system that relies more on statutes and codes. In civil-law countries, laws often prohibit parties from walking away from a negotiation without just cause after talks have progressed to a certain point, such as when one side believes a contract is imminent, write Marsden and Siedel. In many European countries, if the abandoned party can prove that a contract appeared to be forthcoming, the departing party can be required to compensate them for damages and certain expenses.
This doesn’t mean you can’t turn to a better deal when negotiating in civil-law countries. But you should stipulate in writing before negotiating that you reserve the right to break off talks during the process. Such clear communication in negotiation can also help preserve the relationship if you later decide to walk away. Moreover, there may be circumstances in common-law nations such as the United States where you would be bound to an agreement that hasn’t yet been finalized.
The takeaway: Before you negotiate, consult with experienced contract lawyers in the nations where you do business to determine when and how you can resort to your BATNA.
How Can You Avoid Common BATNA Mistakes?
These negotiating tactics can help you make the most of your BATNA rather than letting it steer you off course:
- Choose one BATNA. As part of your BATNA analysis, compare your alternatives, identify the best one, and set the others aside before you negotiate.
- Value your BATNA realistically. Factor in the costs, risks, and timing of pursuing your alternative, and don’t let a weak one drag down your first offer.
- Set goals in words, not numbers. Rather than debating precise figures, frame your target in general terms (such as “I’ll make a high opening offer”) to reduce the pull of your other alternatives.
- Know the rules before you walk. When negotiating abroad, consult a local lawyer to learn whether the law limits your ability to break off talks.
The takeaway: When analyzed with care, your BATNA can bolster your bargaining power and motivate you to negotiate for a better outcome.
BATNA Mistakes at a Glance
| Possible Pitfall | What Could Go Wrong? | How to Avoid the Trap |
| Multiple alternatives | Comparing several alternatives makes the best one feel like a win and leads you to aim too low. | Use BATNA analysis to identify your single best alternative, and focus on it alone. |
| A weak BATNA | A poor alternative becomes a low anchor that drags down your first offer. | Base your first offer on your goals and the deal’s value to the other side, not on your BATNA. |
| An overvalued BATNA | Overconfidence in your alternative leads you to concede too little or reject good deals. | Account for the costs, risks, and timing of pursuing your BATNA, and ask others to test your assumptions. |
| Walking away without checking relevant laws | In many civil-law countries, breaking off late-stage talks can leave you liable for damages. | Consult local counsel, and reserve the right to end talks in writing. |
BATNA FAQs
What are the most common BATNA mistakes?
They include letting multiple alternatives anchor you to a less ambitious first offer, overestimating your BATNA’s value, treating your BATNA as a target rather than a floor, and walking away from a negotiation without understanding local laws.
Is it better to have more than one BATNA?
Strictly speaking, you have only one BATNA: your best alternative. Pursuing several alternatives can help you find the best one, but keeping multiple options in mind while you negotiate can cause you to settle for too little. To avoid this trap, identify and focus on your best option.
What’s another common BATNA mistake?
In research by Schaerer, Roderick Swaab, and Adam Galinsky, negotiators with a weak alternative sometimes made less ambitious first offers than those with no alternative at all. Why? Because the weak BATNA led them to anchor too low. To compensate when your BATNA is weak, base your first offer on your goals and the deal’s value to your counterpart rather than on your alternative.
Is walking away from a negotiation always an option?
Not always. In many civil-law countries, parties who abandon talks without just cause once a deal appears imminent may be liable for the other side’s damages and expenses. Consult a local lawyer, and reserve the right to end talks in writing before you begin.
Join the Discussion
What BATNA mistakes have you made in negotiation, and what did you learn from them?
