Outside Option

02What People Think

“An alternative only matters after I have decided to leave the current negotiation.”

03What’s Underneath

Someone asks a friend to accompany them to an awkward family wedding. The friend starts adding conditions, assuming nobody else is available. Then another friend offers to come. The original proposal has not changed, but its attractiveness has: saying no now leads somewhere workable.

An outside option is an alternative to the agreement currently being discussed. It may involve another person, a different arrangement or proceeding alone. Its quality, availability and timing matter. A vague possibility that cannot actually be used before the deadline provides a different kind of support from a confirmed alternative.

An outside option is related to BATNA, the best alternative to a negotiated agreement, but the terms are not identical. A person may have several outside options, only one of which is best. The alternative also differs from an ambitious demand inside the current deal. Asking for a better bedroom is a position; having another place to live is an outside option.

04The Game

If this agreement does not happen, what can the person actually do instead, at what cost and on what timetable? That comparison changes the meaning of an offer before anyone walks away.