This is the next installment in my too-many-part series, Everything You Know About Dispute Resolution is Wrong.
Today’s episode was prompted by Michael’s post about an article in the Chronicle of Higher Education in which the author describes her strategy of improving her BATNA to escape a crappy job as a non-tenure-track instructor. Michael suggested that we might use that article as the basis of an exam question asking students to analyze the article.
As a public service, I provide herewith the correct answer.
This is important because I think that most colleagues in our DR community would get the question wrong if they took the exam. I feel fairly confident about this claim because I have reviewed major negotiation texts and they generally get this wrong, IMHO.
All the negotiation texts I reviewed refer to BATNAs for developing negotiation strategy without mentioning the more useful concept of MLATNAs. Hopefully, you are at least aware of the latter – the most likely alternative to a negotiated agreement (not just the best alternative). Although the texts generally discuss analyzing probabilities of possible alternatives, they often refer to the alternatives as BATNAs.
Consider a plaintiff who could win a $1 million verdict at trial if everything broke her way. This truly is her BATNA. If she did a decision analysis to reflect the risks of various elements of her case, she might produce an expected value – or MLATNA – of $100,000.
If the defendant offered to pay $500,000, should she reject it because it is less than her BATNA? She would be stark raving mad to do so.
The problem is that many people refer to $100,000 as the plaintiff’s BATNA. That is like saying, “This piece of fruit is an apple, but I will call it an orange.”
Note that making adjustments for risk tolerance (e.g., the plaintiff would accept less than $100,000 because she is afraid of losing at trial) is not the same thing as revising one’s estimate of the MLATNA based on new assessments of the likely trial outcome.
Part of the confusion arises when analyzing situations where there is little or no uncertainty. For example, in the article Michael referred to, the author arranged other employment so that she could be confident about her BATNA when she told the employer to take the job and shove it (or some reasonable facsimile thereof). In that case, her BATNA was essentially the same as her MLATNA.
In many cases, especially those in litigation, there is a lot of uncertainty, in which case there is a huuuuuge difference between the BATNA and MLATNA. This is important because many of our students – and us too, Pogo – are sloppy thinkers so that when we say BATNA, we think “best” alternative to a negotiated agreement without much thought.
So I regret to inform you that if your answer reflected this confusion of terminology, you would receive a failing grade on my exam. (Also, you lose points if you refer to MLATNA as Mylanta.)