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How Tribalism Influences Our Financial Decisions

Americans will hurt themselves financially to avoid benefiting the other political party.

Imagine that you've just been hired, and you're negotiating a salary. What would prompt you to accept a smaller figure? Excellent health insurance? A relaxed, comfortable work environment?

How about the assurance that your employer shares your political leanings?

Newly published research suggests ideological compatibility, or the lack thereof, influences decisions that affect our personal finances—including the amount of money we are willing to work for.

"The impact of party attachments on economic choices is likely to be stronger and more widespread than generally recognized," write researchers Christopher McConnellYotam MargalitNeil Malhotra, and Matthew Levendusky. "Partisanship's power is not limited to politics."

Their research, published in American Journal of Political Science, describes three studies that demonstrate how political polarization affects our economic choices. Two of them suggest that people are more interested in favoring their own group than harming the other, but the third implies hostility toward those in the opposing camp.

One study featured 1,235 people recruited online. After filling out a questionnaire that included information on their political leanings, they were offered freelance work copy-editing website content.

All then completed one of three versions of an editing test—one of which revealed the work involved fundraising for Democrats, another that revealed it involved fundraising for Republicans, or a third that disclosed it was for a presumably non-partisan non-profit.

Afterward, participants declared how much money they would require to perform a similar job. The researchers report they demanded less money if the work involved supporting their own party. It seems many of us have an in-group discount rate.

Another study featured 3,266 people who had previously reported their political ideology and degree of partisanship. They were re-contacted and given a tempting offer: They could either receive a gift card worth either $3 or $6. The catch is that the latter would be paired with a $4 donation to "the opposing party's national committee."

"The donation is designed to be small enough such that respondents know it will not affect the outcome of elections," the researchers explain, "but large enough to evoke animus towards a disliked group."

And that it did: "Three-fourths of respondents were willing to give up a doubling of their bonus payment simply to avoid making a donation to the other party." Raising the figures (to $6 free or $9 plus donation) decreased this tendency by less than 5 percent.

"It is not surprising to find that strong partisans overwhelmingly reject the partisan offer," the researchers write. "What is more surprising and unexpected is that fully two-thirds of weak and leaning partisans similarly reject" the proposed trade-off.

This suggests "that a majority of people, including among those with only modest ties to their party, are willing to forego gains to express their partisan identities."

The researchers are unsure what drives these decisions. "People may infer characteristics such as trustworthiness based on partisanship," they write in an essay describing their findings, "Or [they] may simply be acting emotionally. Either explanation would fit the patterns we have found."

So, if you want to see these results in a positive light, you can focus on the fact they suggest people are surprisingly unselfish. After all, they will sacrifice personal gain to help their "tribe."

On the other hand, the results also confirm that this selflessness does not extend to perceived opponents. At best, such people are met with what Stanford University neuroscientist Robert Sapolsky calls "savage indifference."

"Taken together, our studies offer substantial evidence that partisanship shapes real-world economic decisions," the researchers conclude. "All four experiments offer evidence that partisanship influences economic behavior, even when there are real [financial] or professional costs."

Perhaps we can think of them as tribalism taxes.