How Uncertainty and Ambiguity in Tournaments Affect Gender Differences in Competitive Behavior

40 Pages Posted: 10 Jun 2019

See all articles by Loukas Balafoutas

Loukas Balafoutas

University of Innsbruck

Matthias Sutter

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods; University of Cologne - Department of Economics

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Abstract

Tournament incentives prevail in labor markets. Yet, the number of tournament winners is often unclear to competitors. While it is hard to measure how this uncertainty affects work performance and willingness to compete in the field, it can be studied in a controlled lab experiment. We present a novel experiment where subjects can compete against each other, but the number of winners is either uncertain (but with known probabilities) or ambiguous (with unknown probabilities for different numbers of winners). We compare these two conditions to a control treatment with a known number of winners. We find that ambiguity induces a significant increase in the performance of men who choose to compete, while we observe no change for women. Men also increase their willingness to enter competition in the presence of ambiguity. Overall, both effects contribute to men winning the tournament significantly more often than women under uncertainty and ambiguity. These findings suggest that management should make tournament conditions transparent and information available in order to prevent gender disparities from increasing under uncertainty and ambiguity.

Keywords: gender, competition, uncertainty, ambiguity, experiment

JEL Classification: C91, D03, D09

Suggested Citation

Balafoutas, Loukas and Sutter, Matthias, How Uncertainty and Ambiguity in Tournaments Affect Gender Differences in Competitive Behavior. IZA Discussion Paper No. 12348. Available at SSRN: https://ssrn.com/abstract=3401116

Loukas Balafoutas (Contact Author)

University of Innsbruck ( email )

Universit├Ątsstra├če 15
Innsbruck, Innsbruck 6020
Austria

Matthias Sutter

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

University of Cologne - Department of Economics

Cologne, 50923
Germany

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