What Is BATNA & WATNA in Negotiation?

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  • 0:03 Acronyms Aplenty
  • 1:01 More About BATNA
  • 2:16 More About WATNA
  • 3:03 Lesson Summary
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Lesson Transcript
Instructor: David Whitsett

David has taught computer applications, computer fundamentals, computer networking, and marketing at the college level. He has a MBA in marketing.

Most people have heard of best-case and worst-case scenarios. BATNA and WATNA are slightly expanded versions of these concepts. In this lesson, we'll define BATNA and WATNA and give negotiation examples.

Acronyms Aplenty

Say your house needs a new roof. You call up a company and get an estimate. You want to negotiate the price, but before you do, it would really benefit you to work out the best and worst case scenario of not taking the offer. Is your best case that you'll just go with someone else? Is your worst case that you go without a new roof and suffer mold or floods from the rainy season?

This scenario deals with BATNA and WATNA. Right off the bat, we're into acronyms, so let's get these defined so we can get to the good stuff.

  • BATNA stands for best alternative to a negotiated agreement
  • WATNA is the worst alternative to a negotiated agreement

So in general, if you walk into the bargaining room with a good BATNA in your back pocket, you feel better about your negotiating position. Knowing your WATNA can help you evaluate when it may be time to walk away from the bargaining table: if your WATNA is better than the offer from the other side, maybe it's time to walk out.

More About BATNA

The BATNA is the best you can do without the cooperation of the other party in a negotiation, but you can't use your BATNA until you've defined and prioritized your alternatives. For example, if you're shopping for a car, you might map out more than one choice in case you to get to the dealership and your primary selection is gone.

When you think about your BATNA, it's also helpful to consider what the other side's BATNA might be. Success in negotiations is due in large part to preparation, so if you can figure out their BATNA, it will help you in formulating a reasonable offer.

If your BATNA is strong, you can probably negotiate more favorable terms, especially if the other side is aware of your BATNA. The flip side is that if the other side knows your BATNA is poor, they will have an advantage.

The purpose of a negotiation is to obtain an agreement with the other party that's more beneficial than what you get without negotiating, so knowing your BATNA tells you how much it will cost you if you don't come to an agreement.

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