BATNA (Best Alternative to Negotiated Agreement) Value Estimator
Estimate the net present value of your best alternative option outside of a negotiation. Compare it against any proposed deal to determine your walk-away threshold.
Fill in the fields above and click Calculate.
Formula
Step 1 — Net Alternative Value:
Net Value = Gross Alternative Value − Costs to Pursue Alternative
Step 2 — Probability-Weighted Expected Value:
Expected Value = Net Value × (Probability of Success / 100)
Step 3 — Present Value (monthly discounting):
PV = Expected Value / (1 + rannual/12)t
where t = months to realise the alternative.
Step 4 — Risk-Adjusted BATNA Value:
BATNA Value = PV × (1 − Risk Adjustment / 100)
Walk-Away Rule: Reject any negotiated deal offering less than the BATNA Value.
Assumptions & References
- BATNA concept introduced by Fisher & Ury in Getting to Yes (1981, Harvard Negotiation Project).
- All monetary values are in the same currency and nominal terms.
- Discounting uses monthly compounding:
(1 + r/12)^t, consistent with standard time-value-of-money practice. - Probability of success is a subjective estimate; use historical data or expert judgment where available.
- Risk Adjustment (0–50%) captures residual uncertainty not already reflected in the probability estimate (e.g., execution risk, market volatility).
- Costs should include all direct and indirect costs: legal, transition, opportunity, and search costs.
- The BATNA Value represents the minimum acceptable value of a negotiated agreement — any deal above this threshold creates positive surplus over the alternative.
- This tool does not account for non-monetary factors (relationships, reputation, strategic value) which may shift the effective walk-away point.
- Reference: Lax, D.A. & Sebenius, J.K. (1986). The Manager as Negotiator. Free Press.