Reservation Point and ZOPA in Negotiations - Explained
What is the ZOPA between Reservation Points?
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What is the reservation point in a negotiation?
The reservation point (also known as a resistance point) is the minimum acceptable term or terms that a negotiator is willing to accept before she ceases to negotiate and walks away. The reservation point may concern a single interest or collective value ascribed to any number of interests.
If the terms of the negotiation cannot meet or exceed the reservation point, the negotiator may walk away from the negotiation in favor of her best available alternative or BATNA. In this way, the BATNA is the strongest influence when establishing a reservation point. As such, an effective negotiator must recognize her own BATNA, as well as seek to identify the BATNA of the other party.
What is the ZOPA in a negotiation?
Each party's reservation point establishes the Zone of Potential Agreement or ZOPA. As the name implies, if the negotiators are able to agree upon terms that are better than their individual reservation points (means that they are within the ZOPA), it should result in a negotiated agreement.
Back to: NEGOTIATIONS
Discussion: Can you see why the BATNA is the driving force behind establishing a reservation point in a negotiation? Can you think of any reasons why the BATNA would not set the reservation point for a negotiator? Do you think a reservation point ever changes either before or after a negotiation begins?