Framing. Consider the following bargaining situation. The union claims that its members need a raise to $12 an hour and that anything less will represent a loss due to inflation. Management argues that the company can’t pay more than $10 an hour and that anything more would impose an unacceptable loss. If each side had the choice between settling at $11 an hour or going to binding arbitration, they are likely to take the risk and move toward arbitration rather than settlement.