Role of BATNA and Pareto Optimality in Dyadic Multiple Issue Negotiations

The role of the Best Alternative to a Negotiated Agreement (BATNA) has been the subject of much discussion in the literature recently. We extend this discussion concerning BATNAs and reservation prices to multiple issues. We have conducted an experiment to test several hypotheses concerning the role of BATNAs in a contextually relevant three-issue dyadic negotiation. We further improve the methodology of conducting negotiation experiments by not requesting the subjects to follow a given value point structure. We report the results of the experiment and discuss their implications.