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Oct 21, 2013 08:43 AM EDT

Black People Need To Pay More to Close Financial Dealings than Whites, Study

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The recent controversial shooting of Trayvon Martin followed by the acquittal of George Zimmerman has again reared the ugly head of racism.  The right to liberty is enshrined in the Constitution but racism persists in the country in some form or the other.

 African Americans still face discrimination in housing, education and career opportunities among others.  

In a recent study at New York University, researchers discovered one more area where racism determines the end result, financial dealings. 

The researchers found that black people needed to shell out more money to a white person to close a deal. People from other ethnic backgrounds were given better offers for similar deals.

 Researchers said that specific stereotypes or prejudices normally associated with black American men like 'aggression, hostility, and untrustworthiness' impacted their chances of securing a fair deal while negotiating with a white person.

The researchers arrived at the conclusion after asking 49 participants from different ethnic and racial backgrounds to participate in an 'ultimatum game', where players were asked to either refuse or accept offers of money.

The participants were segregated in pairs, where one was a proposer and was asked to split $10 with the partner. If the partner accepted the offer, the money would be split accordingly, but if it was rejected then the pair had to walk away empty handed.

The results, published in Psychological Science, a journal of the Association for Psychological Science, showed that overall the participants were more likely to accept an offer from a white proposer rather than a black one. The researchers also discovered that black people had to offer more money to make their partners accept a deal.

The study was inspired by the U.S. Government's debt ceiling debates in the summer of 2011.

"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 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?" Psychologist Dr Jennifer Kubota, who led the study, said in the journal.

"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," said Kubota and Elizabeth Phelps of New York University.

"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," Kubota and Phelps conclude.

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