Racism still exists when cutting a deal: Black people have to offer MORE money to seal the same contract
- People from other races, however, didn't suffer the same discrimination
- Research was inspired by the 2011 U.S. Government's debt ceiling debates
- Scientists observed how at this time, political parties were prepared to reject a deal even if it appeared to damage their own supporters
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Racism still exists when cutting a deal, according to a new study.
Black people had to put more money on the table for a white person to accept their offer in comparison to offers from people from other ethnic backgrounds and other white people.
The study carried out at New York University was set up to test if racial tensions came to the surface in financial deals.
The study found that black people had to put more money on the table for a white person to accept their offer in comparison to offers from people from other ethnic backgrounds or other white people
Researchers believed that prejudices linking black American men with ‘aggression, hostility, and untrustworthiness’ would affect their chances of getting a fair deal when negotiating with a white person.
They set up a series of experiments where 49 participants from different ethnic and racial backgrounds engaged in an ‘ultimatum game’, where players either rejected or accepted split offers of money.
The participants were paired off and researchers designated one of the pair as a ‘proposer’, who was given $10 to split with their partner.
If their partner accepted the offer the money would be split accordingly, but if it was rejected then both the participants had to walk away from the failed deal empty handed.
Research showed how on the whole the participants were more likely to accept a monetary offer from a white proposer than a black proposer
The results, published in the journal Psychological Science, showed how on the whole the participants were more likely to accept an offer from a white proposer than a black proposer.
Further analysis showed than black people had to offer more money in order for their opposite numbers to accept the deal.
Researchers believe the effect was down to ‘specific stereotypes or prejudices associated with black Americans’.
The study was inspired by the U.S. Government's debt ceiling debates in 2011 where political parties were prepared to reject a deal even if it appeared to damage their own supporters.
Psychologist Dr Jennifer Kubota, who led the study, said: ‘Many members of both the House and Senate seemed willing to incur costs that would hurt their own constituents in order to vote along political lines.
The study was inspired by the U.S. Government's debt ceiling debates in 2011 where political parties were prepared to reject a deal even if it appeared to damage their own supporters
‘The debate led us to wonder: Are people willing to punish members of another group when they perceive their behaviour as unfair, even when exacting that punishment comes at a personal cost?
‘It has been suggested that race bias in economic decisions may not occur in a market where discrimination is costly, but these findings provide the first evidence that this assumption is false.
‘Our work suggests that after offers are on the table, people perceive the fairness of those offers differently - even when they are objectively identical - based on race.’
The study highlighted the fact that the amount of money changing hands was small in the experiments and, had the potential financial gain been greater regardless of how ‘fair’ the deal was, the participants may have been less likely to reject it.
However, Dr Kubota and her colleagues said their findings have 'broad implications' for other situations where people punish others because they think they are being unfair.
She said: ‘These findings may be especially relevant for legal and economic decisions and serve as a potential example of how people punish unfair or negative behaviour in real-life.’
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