In Competitive Auctions Women Value Winning More Than Men

In the heat of competitive auctions, women value winning more than men, according to a new study.

Women also bid more in auctions than men, but only when competing against other women, according to the study. Against men, women bid about the same as men competing against each other.

The new study challenges decades of research showing women are less likely to compete, according to Dr. Roman Sheremeta, the study’s co-author and an assistant professor of economics at the Weatherhead School of Management at Case Western Reserve University.

“Our results show women are more competitive than men, once inside a competition,” he said. “But there is a barrier of entry: Women are less likely to enter competitions in the first place.”

The findings also offer insight into the gender gap in pay. Women in the U.S. earn about 21 percent less than men. It also delves into why women occupy only five percent of Fortune 500 CEO positions.

“While some gender gaps are shrinking, they still exist,” said Sheremeta. “Our results could provide insight into the forces contributing to gender inequality in the workplace, especially given that competitiveness can be strongly correlated with choosing to pursue prestigious employment.”

In an experiment known as an “all-pay auction,” researchers found women risked more when the costs of competing against other women were unrecoverable, such as winner-take-all. Against men, women bid about the same as when men competed with men.

“The notion that women are less competitive than men has worked its way into decision-making and is a part of our culture,” said Sheremeta. “Our results seem to challenge this idea.”

The study, published in Economic Letters, challenges existing beliefs, such as:

  • women believe men will do better in competitions. Men think men will do better. In reality, they perform about the same;
  • when odds favor women in competitions against men, they still tend to shy away from participating;
  • women are as competitive as men in negotiating equal salaries — when negotiating on behalf of others;
  • women are more than twice as likely to have apprehension about negotiating, which could explain, for example, why women tend to pay higher prices for vehicles;
  • women are overconfident less often than men.

“In some ways, these results blow out previous research, though they are more provocative than conclusive,” Sheremeta said.

Gender-competition research could eventually inform policies and interventions to create gender-equal workplaces, he concluded.

The study was co-written by graduate student Zhuoqiong (Charlie) Chen, of the London School of Economics, and Dr. David Ong, of Peking University and the Chinese University of Hong Kong.

Source: Case Western Reserve University