At the end of the rainbow

Political correctness, polarization and economic decision-making behavior

Political correctness is an integral part of social and media discourse. But what happens when the range of opinions is narrowed and possibly economic decisions influenced?

Proponents argue that politically correct language does justice to all segments of the population and leads to more constructive and respectful interactions. Critics, on the other hand, speak of ideological stubbornness. They argue that insisting on politically correct language that is fair to every demographic group, no matter how small, polarizes society, stifles free speech, and hinders efforts to reach consensus on pressing social and economic issues.

In this at times heated discourse, one effect of political correctness has been overlooked, with potentially far-reaching consequences: the people's decision-making behavior. If the range of opinions is narrowed by political correctness, this could have a negative impact on people's willingness to take risks, but also on their general willingness to cooperate. It could also influence the decisions of C-level managers, thus possibly leading to business paralysis. Yet risk taking and cooperation are essential for social cohesion and a prosperous economy. Together with his team, Matthias Sutter wants to use empirical data to help steer the public discussion about the effects, risks and side effects of political correctness in a more objective direction.

Research aim

I expect the project to provide fundamental insights into how economic activity is influenced by politically correct language, which is crucial for our prosperity and the way we live together in our society. From perspective of physics, rainbows have no beginning and no end. They are circles of which we only see a part. The rest is hidden beyond the horizon - hence we ought to to expand our horizon objectively!

- Prof. Dr. Matthias Sutter on the project and its ambiguous title

The project will be carried out at the Max Planck Institute for the Study of Collective Goods. It will investigate how exposure to politically correct language over a longer period of time affects people's economic decision-making, social norms, and willingness to express their own opinions.

Economist Matthias Sutter will conduct a field experiment with 3,000 participants from all walks of life. Over a defined period of time, the participants will consume political and economic news via a specially developed app. Random assignment to an intervention condition (with politically correct language) and a control condition (with neutral language) will allow causal inference about the effects of politically correct language. The results of the study will be published by the Institute.