“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. ...