Negotiation research you can use: The high cost of (unconscious) racial bias

By on / Teaching Negotiation

People who believe that they are free of racial bias are often dismayed by their results on the Implicit Association Test (IAT), an online task developed by Anthony G. Greenwald (University of Washington), Brian Nosek (University of Virginia), and Mahzarin R. Banaji (Harvard University). When required to quickly match African American and white faces with various personal attributes, for instance, many people easily match images of African American faces with negative words (mean, awful) but struggle to match them with positive words (good, peace), a tendency that reverses for white faces. The test purports to reveal the underlying stereotypes that infect our decisions, even without our knowledge. (To take a version of the IAT yourself, visit https://implicit.harvard.edu.)

Could unconscious racial bias affect our decisions in negotiation, and could it cost us real money? To find out, researcher Jennifer T. Kubota of New York University and her colleagues had study participants play the “ultimatum game,” a classic game in which one party, the proposer, is given a sum of money and allowed to decide how much of it to offer to another party, the responder. If the responder accepts the proposer’s offer, each player collects her portion of that offer. If the responder rejects the offer, both walk away empty-handed.

From a rational perspective, responders should accept any offer above $0, as rejection will leave them with nothing. Yet past research shows that responders often irrationally reject low offers out of a desire to punish proposers for unfair treatment.

Quick decisions
The participants in Kubota and colleagues’ study, most of whom were white, played numerous rounds of the ultimatum game in the role of responder. They were told that they were facing a different proposer each round and were shown a photograph of their alleged proposer prior to each trial. The individuals in the photos were all men but of different races. The participants were told that each proposer had $10 to allocate. The proposers (actually, the experimenters) made low offers, ranging from $0 to $3.80, which the responders had to accept or reject within four seconds. After playing the game, participants completed an IAT to determine whether they had an underlying bias against African Americans.

The results showed that, against their own financial interest, participants accepted more offers and lower offers from white proposers than from African American proposers. That is, whether they were aware of it or not, participants sacrificed their own gains in order to discriminate against African Americans. This was true for participants of different races and was most pronounced for those whose IAT results revealed higher implicit racial bias. Interestingly, the overall racial bias of the participants was lower than that of the general population, suggesting that this type of discrimination may be greater in the real world.

Taking it slowly
Fortunately, in negotiation, we rarely need to make decisions as quickly as the participants did in this study. Because speed increases our reliance on intuition, which is often faulty, the findings suggest the importance of taking time to audit our decision making for racial bias. In doing so, we may be able to avoid both discriminating against others and incurring the financial cost that can result.

Resource: “The Price of Racial Bias: Intergroup Negotiations in the Ultimatum Game,” by Jennifer T. Kubota, Jian Li, Eyal Bar-David, Mahzarin R. Banaji, and Elizabeth A. Phelps. Psychological Science, 2013

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