Truth 10. Don’t reveal your BATNA
“Why is it so bad to reveal my BATNA?” you may ask. Once you reveal your BATNA, the other party has no incentive to offer you any more than your BATNA. Consider the following scenario:
Home seller: “My house is listed at $250,000. Another buyer has made an offer, but it’s only for $175,000, which is too low. I’d like you to offer something in the range of $225,000 to $240,000.”
Homebuyer: “Your house is lovely. However, I have my own financial needs to consider. I’ll make you a cash offer of $176,000, and we can close at your convenience.”
If you sensed something wrong with the home seller’s approach, you’re right: The seller revealed the BATNA to the other party. What’s more, the BATNA was relatively unattractive. Once the homebuyer knows this information, she has absolutely no incentive to offer the seller anything but the bare minimum over the seller’s BATNA, as illustrated in this example. Once you reveal your BATNA, the counterparty has you over a barrel.
Think of yourself as a CIA agent who has taken an oath never to reveal your BATNA, lest it compromise the nation’s security.
Rest assured that other parties will seek information about your BATNA in a million different ways. They will prod you, quiz you, and taunt you. It’s best to think of yourself as a CIA agent who has taken an oath never to reveal your BATNA, lest it compromise the nation’s security.
Are there special cases in which it makes sense to reveal your BATNA? I can think of only two:
▪ The eleventh hour is at hand, and negotiations are at a standstill. You’ve spent all day negotiating and gotten nowhere. If you don’t reach an agreement, you’ll miss your flight home. Before you walk out the door, you might consider revealing your BATNA. There’s a chance the other party may meet it or beat it.
▪ You have a fantastic BATNA and would be happy simply to have the counterparty match or trivially improve upon it. But if you choose to reveal your BATNA, understand one thing: You’re not going to get an offer significantly more attractive than it from any rational other party.
These situations are truly rare. If you’re like me, you don’t want the other party to simply meet your BATNA—you want him to think it’s much more attractive than it really is, so he’ll make you a much better offer. So, don’t share your BATNA unless you absolutely have to. And, even then, proceed carefully.