What is the full form of ZOPA
What is the full form of ZOPA
ZOPA: Zone Of Possible Agreement
ZOPA stands for Zone Of Possible Agreement. Zone Of Possible Agreement(ZOPA) also known as zone of potential agreement or bargaining range, is considered an area where two or more negotiating parties may find common ground.
It is this area where parties will often compromise and strike a deal. In order for negotiating parties to find a settlement or reach an agreement, they must work towards a common goal and seek an area that incorporates at least some of each party’s ideas.
To determine whether there is a positive bargaining zone each party must understand their bottom line or worst case price. For example, Bob is selling his car and refuses to sell it for less than $5,000 (his worst case price). Maria is interested and negotiates with Paul.
If she offers him anything higher than $5,000 there is a positive bargaining zone, if she is unwilling to pay more than $4,500 there is a negative bargaining zone.