Negotiation

WHAT IS THE ZONE OF POSSIBLE AGREEMENT?
The Zone of Possible Agreement, or ZOPA, is the range in a negotiation in which

two or more parties can find common ground. Here, the negotiating parties can
work toward a common goal and reach a potential agreement that incorporates
at least some of the other’s ideas. ZOPA is also sometimes referred to as the
“bargaining range" or "bargaining zone."
Positive Bargaining Zone
When the terms that both parties are willing to agree to overlap, there is said to
be a positive bargaining zone. That is, the terms the buyer agrees to clearly align
with the terms the seller is willing to accept.
Take the sale of a used car, for example. The buyer is hoping to purchase a
vehicle for a price between $2,500 and $3,000. The seller is willing to sell for a
price between $2,750 and $3,250. In this scenario, a positive bargaining zone
exists between $2,750 and $3,000, where both the buyer and the seller’s terms
can be met.
Negative Bargaining Zone
When the terms that both parties are willing to agree to don’t overlap, there is
said to be a negative bargaining range—also called a Negative Zone of Possible
Agreement or Negative ZOPA. In these instances, a deal can’t be reached under
current circumstances unless one or both parties are willing to adjust their view of
what is acceptable.
In the case of the used car, a negative bargaining zone would exist if the buyer
and seller could not reach an agreement. If the buyer is willing to pay no more
than $3,000, yet the seller is willing to accept no less than $3,500, then neither
party’s terms can be met.
Best Alternative to a Negotiated Agreement
In addition to understanding the ZOPA and negative ZOPA in a negotiation, you

should also consider your Best Alternative to a Negotiated Agreement, or
BATNA, before any discussions take place. The BATNA is the course of action a
party will take if no agreement can be reached during a negotiation. In other
words, a party’s BATNA is what they plan to fall back on if a negotiation is
unsuccessful.
EXAMPLE OF ZOPA IN NEGOTIATION
Harvard Business School Online Professor Mike Wheeler tackles this and other
important negotiation concepts in his Negotiation Mastery course. To start, let’s
listen to Professor Wheeler as he gives us a quick introduction of the Bridport
case, highlighted in the course, and the concept of ZOPA:
In this example, a successful bed and breakfast called the Easterly is negotiating
with Brims, a chain of coffee shops in the area, to prevent the construction of a
building which would impede the inn’s view. As such, the Easterly is attempting
to buy the neighboring land from Brims at a reasonable price.
Of course, the seller wants to drive the price up while the buyer wants to push it
down. Here, the ZOPA exists where both the buyer and the seller are willing to
settle the deal. That's what makes real-world negotiation interesting: Sometimes
multiple outcomes could work for all parties, where there may be limited options
in other scenarios.
The actual size of the ZOPA depends on how the perceptions of particular pairs
of negotiators line up, especially in regards to their walkaway numbers. A price
that could work in the first example might be rejected in the second, even though
both pairs are negotiating the same problem.
FINDING THE ZONE OF POSSIBLE AGREEMENT
Here are some key points to keep in mind when assessing ZOPA that will help
you be better prepared when it comes to negotiating, and ultimately increase
your chances of reaching a deal.
1. Your Success Depends on More Than Just Skill
Luck, good or bad, plays a role. You don't always know who you'll negotiate with
on a given day. Some people will be unreasonable while others may be willing to
offer more than you'd ever hoped. While you should always employ your best
negotiation tactics, remember that some circumstances will always be out of your
control.
2. Know Your Limits
It's a huge advantage to know the upper and lower boundaries of a ZOPA. A
negotiator is understandably reluctant to disclose their walkaway, or bottom line,
as it’s the least attractive deal they would accept before walking away from the
negotiation. By knowing the boundaries of a ZOPA, it's possible to push your
counterpart close to their limit to reach a favorable deal.
3. The Situation Can Change
The ZOPA can grow, shrink, or disappear during the course of a negotiation as
parties refine their own priorities and reassess each other's walkaways. When
preparing for a negotiation, remember that the situation can always change.
Being able to adapt to these changes is a key factor to being a successful
negotiator.
4. The ZOPA Can Be Shaped
As shown throughout the Negotiation Mastery course, much of the interaction in

a negotiation is about shaping perceptions of the ZOPA through persuasion and
other tactical moves, as this is more likely to lead to an agreement.
5. Preparation Matters
Studies have shown that, in cases like Bridport, the parties’ initial aspirations and
expectations before they ever get to the bargaining table have nearly the same
impact on the final outcome as whatever they do and say once they get there.
That's why rigorous preparation is essential.
Going into a negotiation, you seldom know how big the ZOPA is or whether
there's room for agreement at all. If you’ve prepared well, you'll have set a
provisional walkaway line. That establishes one boundary of the ZOPA, but the
other boundary, your counterpart’s walkaway, will be obscure at best, just as
your walkaway will be uncertain to them. That mutual uncertainty underlies much
of the dance of offers and counteroffers that follows.

Negotiation

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WHAT IS THE ZONE OF POSSIBLE AGREEMENT?

The Zone of Possible Agreement, or ZOPA, is the range in a negotiation in which

Positive Bargaining Zone

Negative Bargaining Zone

Best Alternative to a Negotiated Agreement

In addition to understanding the ZOPA and negative ZOPA in a negotiation, you

EXAMPLE OF ZOPA IN NEGOTIATION

FINDING THE ZONE OF POSSIBLE AGREEMENT

1. Your Success Depends on More Than Just Skill

2. Know Your Limits

3. The Situation Can Change

4. The ZOPA Can Be Shaped

As shown throughout the Negotiation Mastery course, much of the interaction in

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