News You Can Use: "A small alcoholic drink could benefit business negotiations, study finds "

From the British Psychological Society:

It is a tradition in many cultures, especially in East Asia, for business negotiations to be accompanied by drinking alcohol. Motivated in part to wonder why this might be, Pak Hung Au and Jipeng Zhang, at Nanyang Technological University in Singapore and Southwestern University of Finance and Economics in China, have tested the effects of a small cup of beer (350ml) on participants' bargaining behaviour.

The study in the Journal of Economic Behavior & Organisation involved 114 people playing a bargaining game in pairs, some of them after a cup of beer, others after non-alcoholic beer (a test of a placebo effect) and some after juice. Each round, each player was allocated a sum of money between $1 to $10 known only to them. Each round they and their partner then had to decide whether to participate with each other or not. If both parties agreed to join together then their initial endowments for that round would be summed and multiplied by 1.2 before being shared equally.

As a pair, these rules meant the participants gained more money the more that they collaborated. However, collaboration was not financially beneficial to individual participants on those rounds in which they had a large initial endowment but their collaborating partner had only a small endowment. Generally what happened is that players opted to collaborate on rounds in which they started out with a small endowment, but chose not to when they had a larger amount. Part of the game involved deducing from any collaboration payouts and other clues how conservatively and individualistically their partner was playing, and responding as they felt appropriate.

In short, the researchers found that more collaboration occurred when both participants in a pair had had a drink of beer (giving them an average blood alcohol concentration level of 0.0406; for reference, outside of Scotland, the UK drink drive limit is 0.08 or 80 milligrams of alcohol per 100 millilitres of blood)...MORE