After the incident, students were asked to choose one of the two actors—still posing as fellow participants—for the teamwork assignment. More than 80% of the students who watched a racist exchange on video said they would not work with the white student. Those who read about racist behavior showed a similar aversion, with 75% preferring the black actor as a teammate. Participants in both groups said they were deeply upset by the racist comments.
The same did not hold true for the participants who experienced the racist event firsthand. None intervened to correct or disparage the white actor, nor did they report being upset by his comments when questioned later. In fact, 71% of the students chose the white actor as their partner for the assignment when he made a racist comment; a similar percentage chose the white partner when he did not make a racist comment.
The study's authors speculate that people who witnessed the event in person were less offended by the racist behavior because of a psychological phenomenon known as the impact bias of affective forecasting, which is the tendency for people to overestimate how strongly they will react to emotional events. Failing to feel outrage, the participants may have then rationalized the racist comment as somehow acceptable and let it pass, the researchers say.
When they're not being monitored or judged, their true attitude presumably emerges. Not only don't they intervene during the racist event, but they don't criticize it afterward. Moreover, 71% of them choose the racist as a partner as if nothing has happened.
Perhaps not coincidentally, roughly 71% of Americans think Indian mascots are okay--even when Indians say they're offensive. Roughly 71% of Americans think Twilight is just a movie and it doesn't matter who plays Jacob Black. Roughly 71% of Americans think Indians roamed the Plains like the savages in old Western movies.
In other words, roughly 71% of Americans think they're not racists when studies show they are. Roughly 71% of Americans are ignorant of their own unconscious biases. Which explains why they tolerate stereotypical mascots, non-Natives cast as Natives, and other cultural offenses.
For more on the subject, see Anti-Indian Racism Explained and Highlights of the US Report to the UN on Racism.
P.S. The percentages given above are only estimates, of course.