The power of alternatives or the limits to negotiation

People faced with upcoming negouauons often seek advice. Invariably, many if not most of their questions have a tactical slant: How much should I find out about the other side's psyche and past? Should I make the first contact? By phone, in person, by mail, or through a third party? Wear a dark suit and meet in an expensive restaurant near my office? Order them strong drinks? Sit with my back to the wall and the sun in their eyes? Make the first offer? Start high? Concede slowly? Settle the easy issues first? Act concili­ atory, tough, threatening, or as a joint problem-solver? Arrange for a "hard­ hearted" partner? Look for self-serving rationales or objective principles? And so forth. Such tactical concerns have often occupied the attention of negotiation analysts and practitioners. Yet practical and theoretical responses to these concerns often share an important implicit premise. By attempting to influence or predict the outcome of a negotiation within a given range of possible agreements, the responses generally take this range as unchanging. By contrast, in this article we investigate a complementary set of questions about the factors and moves that determine and may alter the range of possible agreements. If one characterizes negotiation as an interactive process by which two or more people seek jointly or cooperatively to do better than they could otherwise, then the "otherwise" becomes crucial. The parties' best alterna­ tives without agreement imply the limits to any agreement. For each side, the basic test of any proposed joint agreement is whether it offers higher subjective worth than that side's best course of action absent agreement. Thus, moves "away from the table" to shape the parties' alternatives to agreement may be as or more important than tactics employed "at the table." Actions of the first type delimit the range of possible agreements; those of the second type influence which point in the range may be chosen. The strategic arsenal from which moves of the second type are drawn includes actions that improve alternatives to the negotiation at hand: for example, searching for a better price or another supplier, cultivating a friendly merger partner in response to hostile takeover negotiations, or pre­ paring an invasion should talks fail to yield a preferable outcome.