We examine whether men and women of the same ability differ in their selection into a competitive environment. Participants in a laboratory experiment solve a real task, first under a noncompetitive piece rate and then a competitive tournament incentive scheme. Although there are no gender differences in performance, men select the tournament twice as much as women when choosing their compensation scheme for the next performance. While 73% of the men select the tournament, only 35% of the women make this choice. This gender gap in tournament entry is not explained by performance, and factors such as risk and feedback aversion only play a negligible role. Instead, the tournament-entry gap is driven by men being more overconfident and by gender differences in preferences for performing in a competition. The result is that women shy away from competition and men embrace it. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
Performance: Number of correct answers during each Task. Selection into piece-rate or tournament pay schemes, for Tasks 3 and 4, subjects are asked which pay scheme they prefer to enter/apply.
Performance: There are no gender differences in performance under either compensation scheme. Selection into piece-rate versus tournament pay schemes: Twice as many men as women select into the tournament scheme. 73% of men prefer the tournament, compared to only 35% of women. The gender gap persists when comparing the choices of men and women of equal performance. Compared to payoff-maximizing choices, low-ability men enter the tournament too often, and high-ability women do not enter enough. After controlling for gender differences in general factors such as overconfidence, risk, and feedback aversion, a sizeable part of the remaining gender gap in tournament entry is explained by men and women having different preferences for performing in a competitive environment.