Tuesday, February 19, 2013

Gender and Competition

Why do wages or occupations differ for men and women? There are several explanations for gender-specific differences, however, we do not have a convincing explanation yet. One possible explanation is that--for whatever reason--men are more likely to take risks than women. The analysis of differences in risk-taking has a strong experimental background, both in the laboratory and in the field. Eckel and Grossman (2008) and Croson and Gneezy (2009) provide surveys on experiments which investigate differences between the genders in their risk taking.

In a new working paper, "Evidence from Jumping Competitions", Mario Lackner and I analyze if female athletes differ from male athletes in their competitive behavior, using data from high jump and pole vault competitions. In these sports, we observe athletes choosing a risky strategy, namely the pass of a height. This is a risky strategy as the next jump is without doubt more difficult (the bar is raised). (Sport events are excellent "real-life" laboratories as they allow the analysis of behavior under clear rules, that is extremely difficult to observe in most other situations.)

While the rules for men and women are the same, we find striking differences in how often men and women use passes.

The returns to risk-taking are positive, which indicates underconfidence rather than overconfidence, for both men and women. Overconfident athletes would pass too often, reducing the probability to clear a height. The positive returns to taking risks, however, are much greater for women than for men, indicating that women are considerably less confident than men and could improve their outcomes by choosing to pass more often.

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