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Sunday, December 08, 2013

Why women are less competitive than men

Do Women Shy Away From Competition? Do Men Compete Too Much?

"A series of psychology studies suggest that men are more competitive than women. While boys spend most of their time at competitive games, girls select activities where there is no winner and no clear end point...

If women are less likely to compete, this not only reduces the number of women who enter tournaments, but also those who win tournaments. Hence, it decreases the chances of women succeeding in competitions for promotions and more lucrative jobs. Bertrand and Hallock [2001] show that in a large data set of U. S. firms women only account for 2.5 percent of the five highest paid executives. Ability differences can only explain part of this occupational difference and it is commonly argued that preferences and discrimination can account for the remaining difference. Women may not select into top level jobs because they do not enjoy the responsibilities associated with a managerial position. Or they may avoid these jobs because they tend to have long work hours, which may conflict with the desire or necessity for child rearing. Second, discrimination or anticipated discrimination may cause women and men with equal abilities to hold different occupations. Gender differences in preferences for competition may be an additional explanation for differences in labor market outcome; in particular, it may help explain the absence of women in top-level and very competitive positions...

Despite there being no gender difference in performance under either compensation scheme, we find that twice as many men as women select the tournament. While 73 percent of men prefer the tournament, this choice is only made by 35 percent of the women. This gender gap persists when we compare the choices of men and women of equal performance. Compared to payoff-maximizing choices, low-ability men enter the tournament too much, and high-ability women do not enter it enough...

We find that men are substantially more overconfident about their relative performance than women and that the beliefs on relative performance help predict entry decisions. Although gender differences in overconfidence are found to play an important role in explaining the gender gap in tournament entry, these differences only account for a share of the gap.

To assess whether general factors, such as overconfidence, risk, and feedback aversion by themselves cause a gap in choices of compensation scheme, we also determine if, absent the thrill or fear of performing in a competition, a gender gap in choice of compensation scheme still occurs. We find that combined such factors cause men and women of equal performance to select different compensation schemes. This difference appears to be largely explained by gender differences in overconfidence, while risk and feedback aversion seem to play a negligible role.

Finally, controlling for gender differences in general factors such as overconfidence, risk, and feedback aversion, we estimate the size of the residual gender difference in the tournament-entry decision. Including these controls, gender differences are still significant and large. Hence, we conclude that, in addition to gender differences in overconfidence, a sizeable part of the gender difference in tournament entry is explained by men and women having different preferences for performing in a competitive environment...

Studies examining gender differences in risk attitudes over monetary gambles find either that women are more risk averse than men or that there is no gender difference. Eckel and Grossman [2002a] summarize the experimental literature in economics and conclude that women exhibit greater risk aversion in choices. A summary of the psychology literature is presented by Byrnes, Miller, and Shafer [1999]. They provide a meta-analysis of 150 risk experiments and demonstrate that while women in some situations are significantly more averse to risk, many studies find no gender difference...

One consequence of entering the tournament is that the individual will receive feedback on relative performance. The psychology literature suggests that men and women may respond differently to such feedback. First, there is evidence that women tend to incorporate negative feedback more than men (see, e.g., Roberts and Nolen-Hoeksema [1989]). Second, women, more than men, may view a negative signal as indicative of their self-worth rather than simply their one-time performance on a task. Women may therefore fall into “confidence traps” from which they do not recover easily (see, e.g., Dweck [2000] and references therein). If participants benefit from holding positive beliefs about themselves, then both of these factors may cause women to avoid environments where they receive feedback on relative performance...

Past research on gender differences toward competition has shown that in some mixed gender competitions women do not perform as well as men. For example, Gneezy, Niederle, and Rustichini [2003] examine performances when participants are asked to solve mazes for fifteen minutes. Although men and women perform equally well in a piece-rate scheme, there are large gender differences in performance in a tournament. While a few women perform extremely well, many women do poorly, and the bottom performance quintile is almost entirely comprised of women. Gneezy and Rustichini [2004] and Larson [2005] find similar gender differences in competitive performance.

Rather than examining gender differences in performance under an exogenously given incentive scheme, the focus of this paper is instead one of self-selection...

Our finding that men and women differ in their choice of compensation scheme appears to be a rather robust one, and it has been demonstrated by other researchers as well...

While these laboratory studies replicate our general finding, there is also evidence to suggest that gender differences in be- havior under competition may extend to other domains. For ex- ample, Babcock and Laschever [2003] explore the possibility that gender differences in labor market outcomes may arise because women are poor negotiators and generally dislike the process of negotiating. To the extent that a negotiation can be seen as a two-person competition, their results appear consistent with those on competition. Once again there are two effects: of women first avoiding the competitive scheme altogether and when forced to do so, sometimes failing to compete.

Further evidence that our findings in the laboratory may ex- tend to the real world is that the factors that we identify as causing women to shy away from competition correspond to those empha- sized by women in these environments.30 For example, a report entitled “Women’s Experiences in College Engineering” writes that the exit of many young women is not driven by ability but rather that this decision is influenced by women negatively interpreting their grades and having low self-confidence."


This also helps explain the gender wage gap.


Do Women in China Compete Just As Much As Men? Experimental Evidence from a Cultural Laboratory finds that in China, women were as competitive as men due to social engineering.
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