An Experimental Investigation of Gender Differences in Wage Negotiations

Abstract

There is a consensus that there is a gap between male and female wages. This paper investigates whether this is due to a negotiation gap, and what mechanisms can alleviate it, by examining whether females ask for less in a controlled bargaining setting that accurately models relevant aspects of negotiating over a starting salary. The results are stark: females ask for less, and earn less than males. Providing social information eliminates the negotiation gap, and more importantly, the wage gap.

Keywords: negotiations, gender differences, social comparisons, experimental bargaining, ultimatum game

JEL Classification: C91, C72, J31