What is Bargaining range?

The bargaining range, also known as the zone of potential agreement, refers to the range of outcomes in a negotiation where both parties can find a mutually acceptable agreement. It is defined by the minimum acceptable outcome for one party and the maximum acceptable outcome for the other. For a successful negotiation to occur, the bargaining range must overlap; if it doesn't, the parties are unlikely to reach an agreement. Understanding this range helps negotiators identify their own limits and the potential concessions they may need to make.