Anchor, Target, Reservation & BATNA
Four numbers I used to blur into one: the opening anchor, my target, my reservation point and my BATNA. This module separates them and lets you test whether a first offer on the S$1.80m unit is defensible.
Interactive formats on this page: live anchor/target/reservation/BATNA calculator with instant feedback, ZOPA visualisation with a seller-reservation hypothesis slider, three preset scenarios, 6-question quiz.
Learning objectives
After this module you should be able to:
- Define and separate opening anchor, target, reservation point and BATNA.
- Derive a reservation point from the value of the BATNA, not from its price.
- Judge whether a first offer is ambitious-but-defensible or an arbitrary lowball.
- Locate the ZOPA and explain what to do when it does not exist on price alone.
- Explain when making the first offer helps and when it is risky.
Property example — the S$1.80m case
| Item | Simulation parameters (illustrative) | Why it matters |
|---|---|---|
| Seller asking price | S$1.80m | A position. It says nothing about whether the seller needs a net amount, certainty, speed, or is testing the market. |
| My target | S$1.74m | What I aim for — ambitious but realistic. |
| My reservation point | S$1.78m | Private. Derived from the BATNA's value. |
| BATNA | Another unit at S$1.72m, worth ~S$60k less to me | Value-adjusted, the target unit is worth up to ~S$1.78m to me. |
| Opening anchor | Left blank on purpose | Chosen only after diagnosis and with two objective criteria ready. |
In the journal I left my preparation sheet blank by design (Part 3, Table 4), because my real numbers are private and because the act of filling it in is the learning. The calculator below lets you do exactly that.
All property figures are illustrative and do not represent my real numbers.
Interactive exercise
Set your own numbers for the S$1.80m unit. The calculator checks whether your four numbers are coherent (anchor < target ≤ reservation), whether your reservation point is derived from the value of your BATNA, whether your first offer is defensible, and where the ZOPA lies given your hypothesis about the seller's reservation point.
ZOPA visualisation (price only)
Green band = ZOPA between the seller's (hypothesised) reservation and yours. Red band = gap. "BATNA-equiv." = BATNA price + the extra value you place on this unit: the most this unit is worth to you.
Check your understanding
Critical question
Is my S$1.50m really a "first offer"? I concluded it is a counter-anchor, and that changes its function and its justification. But there is a further tension. A well-supported counter-anchor still has to survive the seller's ladder of inference. If I cannot say out loud why the number is S$1.50m, the number communicates disrespect rather than information.
Is the reservation point real? The calculator treats it as fixed, but in practice it moves with information — a defect discovered at inspection, a better alternative appearing. The discipline I need is not a rigid number but a rule: the reservation point may move only because my BATNA's value changed, never because the seller's concession pattern made me feel close.
What I got wrong before
| Before | Now |
|---|---|
| "How low should I start?" was my only preparation question. | I set target, reservation point and BATNA first, then choose the anchor. |
| My BATNA was "I'll find another deal". | My BATNA is a specific, valued alternative — total value, not price. |
| A low opening was good simply because it created room. | An opening must be defensible. An arbitrary lowball can end the conversation or make me look unserious. |
| A discount from the ask measured success. | A discount from an inflated ask may only show the seller anchored well. Success is measured against my BATNA. |
Anchor ambitiously, but not arbitrarily. Know my BATNA, reservation point and target before deciding my first offer.
Key takeaways
- Keep four numbers separate: anchor, target, reservation point, BATNA.
- The BATNA is a total value; the reservation point is derived from it.
- When the other side anchors first, re-anchor with a reasoned proposal rather than reacting to their number.
- Ambitious is fine; arbitrary is not. Prepare two objective criteria before you speak.
- If there is no ZOPA on price, either walk to the BATNA or change the problem by adding variables.