gender differences? experimental economics investigates!
Source Jim Devine
Date 06/03/09/22:42

March 9, 2006
Economic Scene/NY TIMES

The Difference Between Men and Women, Revisited: It's About Competition

GENDER differences are a topic of endless discussion for parents,
teachers and social scientists. The only place where they cannot be
talked about seems to be Harvard. [Not! -- JD]

Luckily, some academic researchers still find the topic important
enough and interesting enough to study. A noteworthy case in point is
a recent National Bureau of Economic Research working paper by a
Stanford economist, Muriel Niederle, and Lise Vesterlund, a University
of Pittsburgh economist, titled, "Do Women Shy Away From Competition?
Do Men Compete Too Much?" (A nontechnical description of the paper may
be found at

It is widely noted that women are not well represented in high-paying
corporate jobs, or in mathematics, science and engineering jobs. As
the authors observe, the "standard economic explanations for such
occupational differences include preferences, ability and

To this list the authors add a new factor: attitudes toward
competitive environments. If men prefer more competitive environments
than women, then there will be more men represented in areas where
competition is intense. [another question: is a competitive
environment always a good thing? might not team-work be more efficient
in many situations?]

Of course, discussions of gender differences of any sort can only be
statements about averages; it is clear that there are women who thrive
in competitive environments and men who do not. Furthermore, attitudes
toward competition may be ingrained or a result of factors like social

Is there any evidence that the hypothesis is true? Do men really
prefer more competitive environments than women? One could cite
anecdote after anecdote, but the authors took a much more direct
approach: they ran an experiment.

By using an experiment, the authors were able to determine not only
whether men and women differ in their willingness to compete, but more
important, whether they differ in their willingness to compete
conditioned on their actual performance.

The economists asked 80 subjects, divided into groups of two women and
two men, to add up sets of five two-digit numbers for five minutes.
The subjects performed the task first on a piece-rate basis (50 cents
for each correct answer) and then as a tournament (the person with the
most correct answers in each group received $2 per correct answer,
while other participants received nothing). Note that a subject with a
25 percent chance of being a winner in the tournament received the
same average payment as in the piece-rate system.

All participants were told how many problems they got right, but not
their relative performance. After completing the two tasks, the
subjects were asked to choose whether they preferred a piece-rate
system or a tournament for the third set of problems.

There were several interesting findings in this experiment. First,
there were no differences between men and women in their performance
under either compensation system. Despite this, twice as many men
selected the tournament as women (75 percent versus 35 percent).

Even if one accounts for performance by comparing only men and women
with the same number of correct answers, the women have a 38 percent
lower probability of choosing the tournament compensation.

Why were the men much more likely to choose the tournament? Perhaps it
was because they felt more confident about their abilities. The data
support this hypothesis, with 75 percent of the men believing that
they won their four-player tournament, while 43 percent of the women
thought they were best in their group.

Though both groups were overconfident about their performance, the men
were much more so. So, women were less likely than men to choose the
tournament compensation system even when actual or believed
performance was considered.

The authors looked at a number of possible explanations for this
finding, one being different risk aversion between men and women. But
they rejected this explanation since the difference in risk aversion
required to explain the results would have been implausibly large.

The results of this experiment are consistent with the finding by a
Berkeley finance professor, Terry Odean, that men trade stocks
excessively, apparently because they (wrongly) feel that they have
exceptional ability to pick winners. Women trade less, but do better
on average, because they are more likely to follow a buy-and-hold

The authors summarized their experimental results by saying, "From a
payoff-maximizing perspective, high-performing women enter the
tournament too rarely, and low-performing men enter the tournament too
often." The low-performing men and the high-performing women are both
hurt by this behavior but, in this experiment at least, the costs to
the women who did not choose the tournament when they should have
exceeded the costs to the men who should have avoided the tournament.

One should not read too much into one study. But if it is really true
that women choose occupations that involve less competition, then one
may well ask why. Sociobiologists may suggest that such differences
come from genetic propensities; sociologists may argue for differences
in social roles and expectations; developmental psychologists may
emphasize child-rearing practices. [or it could be all three?]
Whatever the cause, Ms. Niederle and Ms. Vesterlund have certainly
raised a host of interesting and important questions.

Hal R. Varian is a professor of business, economics and information
management at the University of California, Berkeley.

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