Suppose your research shows that the TV you want is quite new to the market. More research on your local store will lead you to believe that it may be willing to be as low as Amazon price of $900. Now you have a general feeling of ZOPA, or possible agreement area: between $900 (your… Read more Contract negotiations are a pre-defined approach or action plan prepared to achieve a specific goal or goal using the best negotiating strategies, in order to potentially find and conclude an agreement or contract in negotiations with another party or party. Please inquire about our trading services. A negative trading area can be overcome by “cake enlargement.” In integration negotiations, when it comes to a large number of issues and interests, parties who associate interests with value creation enter into a much more rewarding agreement. Behind each position, there are generally more common interests than opposing interests. [4] For example, suppose Dave wants to sell his mountain bike and equipment for $700 to buy new skis and ski equipment. Suzy wants to buy the bike and equipment for 400 dollars and can`t go higher. Dave and Suzy did not reach ZOPA; they are in a negative bargaining area. We start with a horizontal price axis. If we move from left to right along the line, the price goes up.

We must now define the area in which both the seller and the buyer operate. Above the price axis, we will identify the seller. When creating the range of sellers, we are interested in two important information. The first is the desired price. If everything came in favour of the seller, what figure does the seller want to achieve realistically? The second piece of information is how far the seller will go. This visit is usually associated with its BATNA (Best Alternative to a Negotiated Agreement) protocol, which we will discuss in next week`s article. With these two pieces, we can create a range of possible price sellers. Below the price axis, we will do the same for the buyer, again with two information: 1) At what price will the buyer leave? and 2) What is the desired price that the buyer wants to pay? The Concept Zone of a Possible Agreement (ZOPA), also known as the Zone of Potential Agreement [1] or bargaining margin[2], describes the range of options available to two parties in the sale and negotiations when the respective minimum objectives of the parties overlap.

In the absence of such an overlap, i.e. in the absence of a possibility of rational agreement, the opposite concept of noPA (no possible agreement) applies. Where there is a ZOPA, an agreement within the area is reasonable for both parties. Outside the zone, no trading volume should result in an agreement. Your zopa analysis should begin with a review of your best alternative to a negotiated deal or BATNA, write Roger Fisher, William Ury and Bruce Patton in their groundbreaking negotiating text Getting to Yes: Negotiating Agreement Without Giving In. Your BATNA is the approach you would take if you did not reach an agreement in the ongoing negotiations. For example, if you want to accept as much as $70,000 a year for a specific job offer, your BATNA, if you cannot negotiate that salary, may consist of accepting another job, looking for other opportunities or returning to school.