Understanding ZOPA is essential for a successful negotiation, but negotiators must first know their BATNA (best alternative to a negotiated agreement) or “from positions”.  To determine whether there is a ZOPA, both parties must consider each other`s interests and values. This should be done at the early start of negotiations and should be adapted if more information is learned. The size of the ZOPA is also essential. If a broad APA is given, the parties could use strategies and tactics to influence distribution within the ZOPA. If the parties have a small ZOPA, the difficulty is to find pleasant conditions. The Concept Zone of a Possible Agreement (ZOPA), also known as the Zone of Potential Agreement  or bargaining margin, describes the range of options available to two parties in the sale and negotiations when the respective minimum objectives of the parties overlap. In the absence of such an overlap, i.e. in the absence of a possibility of rational agreement, the opposite concept of noPA (no possible agreement) applies. Where there is a ZOPA, an agreement within the area is reasonable for both parties.
Outside the zone, no trading volume should result in an agreement. For example, a lender wants to borrow money at a certain interest rate for a certain period of time. A borrower who is willing to pay this rate and accept the repayment period shares a CCA with the lender, and both parties can reach an agreement. The ZOPA negotiations, “Zone of Possible Agreement,” reflect the positive overlap of the “Walk Aways” or “Real Bases” or “Bottom-Lines” parties on each subject being negotiated. It is therefore very likely that the agreement will be concluded in this area or region of agreement. Our seminar for sellers, purchasing capabilities and other negotiating skills training generally negotiators to train both with large areas of possible agreement, and narrow areas of the possible agreement. The most difficult situations are those where there is little or no ZOPA. If the parties to the negotiations fail to reach the ZOPA, they are in a negative negotiating area. An agreement cannot be reached in a negative negotiating area, as the needs and wishes of all parties cannot be met by an agreement reached in such circumstances. There is a “possible area of agreement” (ZOPA- also known as “negotiation margin”) if there is a possible agreement that would benefit both parties more than their alternative options. For example, if Fred wants to buy a used car for $5,000 or less and Mary wants to sell one for $4,500, those two have a ZOPA.
But if Mary doesn`t go below $7,000 and Fred doesn`t exceed $5,000, they won`t have a zone. To determine whether there is a positive bargaining area, each party must understand its gain or its thought price. For example, Paul sells his car and refuses to sell it for less than $5,000 (his price at worst). Sarah is interested and negotiates with Paul. If she offers him a little more than $5,000, there is a positive bargaining area, if she is not willing to pay more than $4500, there is a negative bargaining area.