Gender Differences in Competitiveness: The Role of Prizes

Abstract

Gender differences in competitiveness have been suggested as an explanation for the observed dearth of women in highly-ranked positions within firms. In this paper we ask: could a price mechanism be used to achieve gender balance? Our results show that if the rewards to competition are sufficiently large, women are willing to compete as much as men and will win as many competitions as men. Nonetheless, while entry increases, it is not enough to reduce average wage cost. Given the proportion of men and women willing to enter the competition at various prizes, firms whose objective is to minimize their costs would not voluntarily chose prizes which allow them to attract a balanced workforce. Hence markets forces would not be sufficient to achieve gender parity. Our experimental design also allows us to propose a new measure for competitiveness that incorporates the fact that incentives change participants’ willingness to compete, namely the minimum prize at which participants chose to enter a tournament. We find that women choose to enter at significantly higher minimum prizes and that only a small fraction of the initial gender gap can be attributed to performance, beliefs, and general factors such as risk and feedback aversion. Thus, even though for some prizes women behave as competitively as men, women nevertheless are less competitive than men.

Keywords: gender, competitiveness, tournament prizes, experiments, firm employment promotion and compensation behavior

JEL Classification: C91, M51, M52, J16, D82