Recently, for the first time in my life, I came across the concept of BATNA — Best Alternative to a Negotiated Agreement. It surprised me that there isn’t even a Russian Wikipedia article about it, while the English one is huge and actually helpful. And the best way to understand a term is to explain it to someone else — so let’s begin.
When preparing for negotiations, you should evaluate:
- Your own BATNA
- Your own WATNA (Worst Alternative)
- The BATNA and WATNA of the other side
This helps you understand both your negotiation power and the other party’s. While preparing, you should consider cultural differences, and try to avoid judgment, emotions, and bias.
A good — though not very relatable — example is peace negotiations between presidents. Not relatable simply because presidents don’t negotiate with me personally; but the example illustrates how hard it is to assess B/WATNA. In the Russia–Ukraine war, for instance, for Zelensky to evaluate Putin’s BATNA, he has to “inhabit” his worldview: to imagine, for example, that “a slow advance and a decade-long war is an acceptable outcome.” Conversely, for Putin to evaluate his own WATNA, he must avoid self-deception — but he has built a system that hides errors instead of exposing them. Add to that the standard game-theory looping of “I know that he knows that I don’t know…” and your head will start spinning.
Thankfully, we’re not presidents, so we can talk about something more grounded — like negotiating a raise with your employer.
I once wrote about the “magic” of a counter-offer (which is only partially true), and it’s a good illustration of one way to strengthen your BATNA: switching to a different negotiator entirely. But when you prepare for negotiations, you should also try to assess your employer’s W/BATNA. Sometimes that means slipping into the uncomfortable role of a capitalist and looking at yourself not as a beautiful human being, but as a cog in the machine. Are you an essential cog? Are you really sure that if you leave, you’ll have a story for Reddit six months later about how they refused to raise your salary by 100$ and then hired fifty people to do your job?
Continuing with the employer example, here’s a common negotiation tactic: you can worsen the other party’s BATNA.
For example, as I wrote last week, you can tie a major business process to yourself — so that your departure becomes genuinely costly for your employer. Dishonest negotiators use a similar trick: car resellers agree to buy your car for 10k $, but when you meet, they suddenly say they won’t give more than 9k $. They know that your real BATNA isn’t to hang up and wait a week or a month for another buyer — it’s to swallow the wasted time, nerves, fuel, and then wait for someone else, fully aware that the next buyer might pull the same stunt.
Another way to strengthen your BATNA is to negotiate with multiple parties in increasing order of desirability.
Let’s say I want to buy jeans at a market. I walk through every stall and, if I like a pair, I ask the seller to hold them until the evening. I know that each next stall has cooler jeans — so my BATNA (“buy from the best of the previous sellers”) keeps improving.
Since I’ve mentioned WATNA several times, let’s take a closer look at why you should evaluate it. If BATNA is your assessment of rational behavior (“If I don’t get a better offer, I’ll stay in my current job”), WATNA is your assessment of the worst-case scenario, even one that may unfold unexpectedly. For example: “If I don’t get a better offer, I’ll stay in a company that might start layoffs — but if they do lay me off, I’ll get six months of severance.”
I don’t want to be laid off, but I’ve evaluated that scenario and I understand its real risks — and that makes me much calmer going into negotiations.
In everyday life, we rarely use game theory or negotiation theory. But we should!
Once, I was planning to go to Mount Vesuvius with friends, but we hadn’t bought tickets to the national park itself. Some friends discussed doing something else, but I insisted: I said I’d go to Vesuvius with or without a ticket — even if alone.
By complete accident, I performed a real B/WATNA evaluation.
My BATNA: “I go alone.”
My WATNA: “I go alone and my friends get annoyed and call me an asshole.” But would I actually be an asshole just for going somewhere alone? Probably not.
Some of my friends probably didn’t have a BATNA that included splitting up, or they overestimated their WATNA like “Misha will be upset.”
In the end, we all went to Vesuvius (and got into the park, by the way — but that’s another story).
In life, we tend to overestimate how dramatic our WATNA is, because most of our “opponents” are friends, partners, colleagues — real people, not abstract functions. And our empathy toward them is great — but we should not forget empathy toward ourselves. You’re not a function either. You’re allowed to disagree.
And one more important thing: if negotiations fail and you fall back to your BATNA, that alternative is still worse than what you could have achieved through successful negotiations.
BATNA is your safety net.
Negotiation is your opportunity.