Reservation Price
Version 1.0.0 · Updated 2026-07-30
CORE DEFINITION
Refers to the highest price a buyer is willing to pay, or the lowest price a seller is willing to accept. This is the psychological bottom line for both parties in a transaction.
SCAFFOLDING EFFECT
Reduce cognitive load
The core anchor in negotiations. Before entering any negotiation, it is crucial to clarify your own reservation price and probe the other party's. It determines the 'Zone of Possible Agreement' (ZOPA) and prevents reaching a deal that is unfavorable to you.
Anchor fast decisions
The highest price a buyer is willing to pay or the lowest price a seller is willing to accept is the psychological bottom line for both parties. The space between the two reservation prices constitutes the 'Zone of Possible Agreement' (ZOPA), which determines whether a deal can be reached and how favorable it is to you.
MINIMUM ACTION
In progress 0/4Practice this model in one real situation:
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Source support: Explicit
- en.wikipedia.orghttps://en.wikipedia.org/wiki/Reservation_priceverified
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