Thinking Clearly About Win-Win
No one should agree to anything in a negotiation that is worse for them than what they are likely to get if no deal is reached. Roger Fisher and Bill Ury made this point thirty years ago in Getting To Yes. First, figure out what no agreement is most likely going to leave you with, try to generate something (a walk-away) that’s better than that, but when you are in an actual negotiation don’t reject something that’s better than your realistic walk-away, even if it won’t get you everything you’d like to have. Fisher and Ury called this point of comparison, your Best Alternative to the Negotiated Agreement (BATNA). A win-win negotiation is something that gets all sides an outcome better than their BATNA. It doesn’t necessarily get anyone everything that they might want.
Decision analysts (like Howard Raiffa) talk about the same idea in terms of a negotiator’s Reservation Price — the amount that they’ve decided ahead of time they won’t accept “less than” or “pay more than.” Putting aside for a moment that BATNAs and Reservation Prices are sometimes hard to estimate or “know” ahead of time, a win-win negotiation can be thought of as a deal in which all sides “gain” relative to their best estimates of their walk-aways.