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Abstract

Discrimination in the marketplace is a significant problem for many blacks and for service providers. However, recent research suggests that some whites may respond similarly to blacks when they witness what they perceive to be a discriminatory act in a service encounter. Using an experimental design methodology, this research investigates the extent to which this occurs. The degree to which an observing customer values the other customer's welfare and feels empathy has been found to explain differences in service failure perceptions among white study participants. White participants high in empathy for blacks were found to react similarly to blacks relative to the inherent negativity of the service failure. This suggests that a service failure involving black customers that hints of discrimination has a greater overall impact on the long-term success of the service firm than originally envisioned. © 2011 Wiley Periodicals, Inc.