In negotiation, the Zone of Possible Agreement (ZOPA) refers to the range where two or more parties can find common ground and reach an agreement. For instance, Chris wants to sell a used car for between 2500, while Sally, the buyer, has a maximum budget of 2000 and $2200 in this case, and the final selling price depends on how effectively the two parties negotiate at the table. We say the ZOPA is negative when the two parties’ ranges do not overlap, and there will not be an agreement that can be reached in this situation.
An informed and accurate ZOPA estimate is a critical step in negotiation preparation. Understanding the other parties’ range will help you anchor the negotiation starting point and claim the lion’s share.
As with every other negotiation preparation consideration, a perfect estimate of ZOPA is often impossible. However, you can create, extend, shrink, or shift a ZOPA by asking the right questions during the negotiation to gather more information and eliminate assumptions. Thus, you could enter a negotiation with an estimated negative ZOPA and still reach a satisfying agreement.