Gender Differences*

PERFORMANCE INCOMPETITIVE ENVIRONMENTS: GENDER DIFFERENCES*

URI GNEEZY MURIEL NIEDERLE ALDO RUSTICHINI

Eventhough the provision of equal opportunities for men and women has beena priorityin manycountries, large gender differences prevail in competitive high-rankingpositions. Suggested explanations include discrimination and differencesin preferencesand human capital. In this paper we present experimental evidencein support of anadditionalfactor: women may be lesseffective than men incompetitive environments, even if they are able to perform similarly in noncompetitiveenvironments. In a laboratoryexperiment we observe, as we increase thecompetitiveness of theenvironment, a signicant increasein performancefor men,but not for women. This results in a signicant gendergap inperformance intournaments, while there is no gap when participants are paid according to piecerate. This effect is stronger when women have to compete against men than insingle-sex competitive environments: this suggests that women may be ableto performin competitiveenvironments per se.

I. INTRODUCTION Allocationsacross genders of high prole jobs remain largely favorableto men, and area majorfactor in thegender gap in earnings.For example, Bertrand and Hallock[2001] found that only2.5 percentof the vehighestpaid executivesin alargedata setof U.S.rmsare women (for areviewon genderdifferences in wages,see Blau and Kahn [2000]). Thenumerous attempts to explain this fact canbe classi ed intotwo broad categories.The rstexplanation restson gender differences in abilities and preferencesand hencein occupationalself-selection [Polachek 1981]. Thesecond class ofexplanations relatesto discrimination in the workplace,which leads todifferential treatmentof men and womenwith equalpreferences and abilities [Black and Strahan 2001; Goldin and Rouse2000; Wennerås and Wold1997]. In this paper wepropose and experimentallytest an additional explanation:women may be less effective than menin competitiveenvironments. This fact will reducethe chances of successfor women when they compete for new jobs, promotions,

*Wethank Daniel Brodkey, StefanoDella Vigna, Gerhard Orosel,Nikita Piankov,Alvin Roth, Lise Vesterlund, and seminar participants at numerous universities.This work was nanciallysupported by theBinational Science Foun- dationand by the German Israeli Foundation.

1049 1050 QUARTERLY JOURNALOF ECONOMICS etc.Similar argumentscan be found in theevolutionary psychologyliterature, 1 and evenin thepopular press.They also form the basis forthe recent wave of support forsingle-sex schooling. The basic argumentis that girls,when shielded fromcompetition with boys,have a higherchance of developingtheir skills and interests in science.Surprisingly, however,there has beenno direct experi- mentaltest of this assertion:in psychologicalresearch, gender differencesin competitionor attitudes toward competitionare hardly mentioned. 2 Totest whether men and womendiffer in theirability orpropensity toperform in competitiveenvironments, we run controlled experiments.They allow us to measure performance precisely, and toexclude any discriminationand any expectationof discrimination. Wehave groups of three men and threewomen perform the task of solvingcomputerized mazes. In thebenchmark treatment, the pay- off toparticipants depends onlyon their own performance: each one is paid axedpiece rate for every maze solved over a periodof fteen minutes.We nd nostatistically signicant gender difference in performance.To study theeffect of competition, we use a tournament:the size and compositionof the group and thetask are the sameas before,but nowonly the participant whosolves the largest numberof mazes is paid proportionallyto the output. The average performanceof men increases, while that ofwomen is notaffected. As aresult,men outperform women on average, and moreso than in thenoncompetitive environment. 3 Thetournament design differs fromthe piece rate condition in twoways: payment is uncertain,and it depends ontheperfor- manceof others. A possibleexplanation ofthe observed gender differenceis that womenare more risk averse, so that if effortis costly,the introduction of uncertainty into payments will affect menand womendifferently. 4 Weintroduce uncertainty without

1.In one of theimportant books of thistradition [Daly and Wilson 1988, p. 161],it is stated “ Intrasexualcompetition is far moreviolent among men than amongwomen in everyhuman society for which information exists.” 2.See for instance, the special issue PsychologicalSex Differences of the American Psychologist [March 1995],pages 145– 171. In this issue even the contributionof the social psychologist [David Buss, “ Originsthrough Sexual Selection,”pages 164 –168]never mentions different attitude to competition as a differenceamong genders. 3.In the noncompetitive treatment, men outperform women but not signi - cantlyso. The gender gap inaverage performance in mixed tournaments is signicant, and signi cantly higher than in thenoncompetitive treatment. 4.For the psychology literature see Byrnes, Miller, and Schafer [1999]. In general,the results seem mixed, with a possiblyhigher degree of risk aversion amongwomen. PERFORMANCEIN COMPETITIVE ENVIRONMENTS 1051 competitionin thenext treatment. Again, onlyone participant is paid (as in thetournament), but this participant is nowchosen at random.We do not ndstatistically signicant genderdifferences in this treatment,and thegender gap in performanceis lower than in thetournament. All theabove experiments were conducted in mixedgroups of threemen and threewomen. But womenmight perform differ- entlyin single-sexgroups than in mixedgroups. As mentioned above,this argumentis usedto support single-sexschools or classes.The basic argumentis that girlsin asingle-sexenviron- menthave a higherchance of developingtheir skills and interests in science.Two main types ofreasoning may support this.The rstis that if girls areless inclined to compete than boys,the environmentin single-sexschools for girls might be less competi- tivethan in mixedsex schools, and hencebe more suitable for girls.The second argument is that girls donot dislike competition:they only do not compete against boys.Hence, in single-sex schoolsgirls will bemore competitive, and educationmore effec- tivethan in mixedschools. 5 Todiscernthe effect of competitionper se on theperformance ofwomen, we measure the performance of women and menin single-sextournaments. We conduct tournaments as before,ex- ceptthat noweach group of six competitorsconsists of either only womenor only men. We nd that theperformance of women is signicantly higherin single-sextournaments than in thenon- competitivetreatment. Hence there are competitive environmentsin whichwomen’ s performanceincreases. Furthermore, thegender gap in performanceis notdifferent fromthe one in noncompetitiveenvironments and issmallerthan thegender gap in mixedtournaments. Whydo we observethis differencein reactionto competition? Thebehavior of men and womenin acompetitiveenvironment maydiffer becauseof differences in skill,talent, and beliefs.A competitiveenvironment may produce differences in behavioras subjectsadjust theirbest choices to different strategicenviron- ments.In particular, if subjectsbelieve (even if incorrectly)that menare more skillful at solvingmazes than women,and effortis

5.See Schuss [2001] and Solnick [1995] and for overviews Harwarth, Maline, andDeBra [1997]and the AAUW EducationalFoundation 1998 report “ Separated bySex: A CriticalLook at Single-SexEducation for Girls.” 1052 QUARTERLY JOURNALOF ECONOMICS costly,one would expectmales to put in moreeffort than females in thewinner-takes-all tournaments. Adifferent explanation is based onthe argument that pref- erencesover outcomes (that is,over individual effort,payment, and performance)are not independent of the institutional setup in whichthey are obtained and in particular ofthe competitive natureof the institution. The crucial element in this argumentis that male’s and female’s preferencesare affected differently by changesin theinstitution (its competitiveness,gender composition,etc.).

II. EXPERIMENTAL DESIGN We rstestablish an environmentin whichwe can measure theeffects of different incentiveschemes on performance.For this purposewe conduct experiments in whichparticipants haveto solvea realtask. 6

II.A.The Task Participants weretold that thetask they have to perform is tosolve mazes. 7 Themaze game has velevels of difculty, from 1 5 easy to 5 5 hard. Each participant was askedto solve one mazeof dif culty level 2 in orderto get familiar with thetask. After eachparticipant nished onemaze, the nal part ofthe instructionswas distributed. Only this nal part differed between treatments. Thegame is solvedby operatingthe arrows on thekeyboard, trackinga markerthrough a mazeappearing onthe screen. Participants wereallowed to use only the arrows to move the cursor.The game was consideredsolved when the marker reachedthe end of the maze. The skill required to solve the problemrequires a moderateamount of familiarity with acom- puter,plus theability tolook forward in themaze to detectdead ends.After nishing amaze,participants wereasked to use the mousein orderto click “ OK”and “Newmaze,” and thenstart the newmaze using onlythe arrows. They were instructed not to use any otherfunction. After nishing amaze,they were asked to recordthis in atable.The experimenter con rmed that they

6.Many experiments directed at models of effort do not involve a realtask, insteadthey model effort as acost. 7.The mazes can be found at http://games.yahoo.com/games/maze.html. PERFORMANCEIN COMPETITIVE ENVIRONMENTS 1053 markedthe table correctly,and theserecords become the data of theexperiment. II.B. TheSubjects Theexperiment was conductedat theTechnion, Haifa, Is- rael.Students at theTechnion receive a degreein engineering, and it is averycompetitive institution. Therefore, we do not expectthe women in oursubject pool to be especiallyintimidated whencompeting with men.Students wererecruited through post- erson campus that promisedmoney for participating in aone- hourexperiment. Students wereasked to call aphonenumber, whichwas writtenon theposter. When they called, an answering machinereplied asking them to leave their phone number, and theywere told that theywould becontacted later. Six participants wereinvited by phoneto each session. Using this proce- dure,we could set up groupsof the desired gender composition: eitherthree females and threemales or six femalesor six males. Thisfact was neverexplicitly pointed outto the participants. Althoughgender was notexplicitly discussed at any time,participants couldsee each other in thelaboratory and hencecould determinethe gender composition of theirgroup. In eachsession afterall six students enteredthe computerized experimental lab, theyreceived a standard introduction.Each participant was told that (s)he will bepaid 20 shekelsfor showing up. 8 Participants thenreceived the instructions for the experiment. They were allowed toask questions privately. In eachtreatment the experi- mentwas replicated tentimes with different participants. Hence in eachtreatment we have thirty men and thirtywomen. Across treatmentswe use different participants; hencewe compareper- formanceacross individuals. Overall,we conducted 54 sessions with 324 participants.

III. COMPETITIVEAND NONCOMPETITIVE ENVIRONMENTS Wewant toestablish whethermen and womendiffer in their ability orpropensity to perform in environmentsin whichthey haveto compete against oneanother. As abenchmarkmeasure of genderdifferences in performance,we use a noncompetitiveen- vironment,a piecerate scheme. To testwhether there is agender differentiated impact ofcompetition on performance, the second

8.At thetime of the experiment, $1 5 4.1shekels. 1054 QUARTERLY JOURNALOF ECONOMICS treatmentmeasures performance in amixedtournament. If men aremore “ competitive”than women,we expect an increasein the genderdifferences in performancewhen moving from a noncom- petitivepiece rate scheme to a competitivemixed tournament. However,a tournamentschedule differs in twoways froma piecerate. First, payment depends onthe performance of the otherparticipants, and second,payment is uncertain.In orderto attributegender differences in tournamentsto the competitive- nessof the environment, we have to investigate whether the introductionof uncertainpayments per se might have a differen- tial impact ontheperformance of menand women. 9 Wetherefore consideran incentivescheme where payment is uncertain, thoughindependent of the performance of others.

III.A. Treatment1: Piece Rate Payment Participants weretold that theyhave fteenminutes to solve mazes.Their reward consists of 2 shekelsfor every maze they solved.Participants would notknow how much other participants earned(i.e., how many mazes they solved).

III.B. Treatment2: Competitive Pay: Mixed Tournament Participants have fteenminutes to solve mazes. Only the participant whosolved the most mazes will bepaid 12 shekelsfor everymaze he or shesolved. In caseof a tie,the winners shared thepayment equally. The other participants in thegroup did not receiveany paymentadditional tothe show-up fee.Participants would notknow how much other participants earned(i.e., how manymazes they solved and hencethe identity ofthewinner of thetournament). III.C. Treatment3: Random Pay Participants have fteenminutes to solve mazes. They are told in advance that onlyone of them (though they do not know whichone) would bepaid 12 shekelsfor every maze he or she solved.This participant was chosenat randomat theend of the experiment,other participants in thegroup did notreceive any paymentadditional tothe show-up fee.Participants would not knowhow many mazes other participants solved.

9.There may be gender differences in risk aversion,or any other kind of aversiontoward uncertainty.See, for example, Rabin [2000] for a discussionon risk aversionon smallgambles. PERFORMANCEIN COMPETITIVE ENVIRONMENTS 1055

FIGURE I Numberof MazesSolved under Piece Rate Thehorizontal axis corresponds to the number of mazessolved, and the height ofeach bar reports the proportion of the 30 male and 30 female participants, respectively,who solved that many mazes.

FigureI and FigureII presentthe number of mazessolved by eachgender for the piece rate treatment and themixed tournament,the competitive environment; the performance under ran-

FIGURE II Numberof Mazes Solved under Tournament Condition Thehorizontal axis corresponds to the number of mazessolved, and the height ofeach bar reports the proportion of the 30 male and 30 female participants, respectively,who solved that many mazes. 1056 QUARTERLY JOURNALOF ECONOMICS dompay closelyfollows the piece rate scheme. To compare the performanceof women and menacross treatments and investi- gategender differences within treatments,we use the two-sided Mann-Whitney U test,which compares distributions. III.D. Performanceunder Noncompetitive Incentive Schemes, thePiece Rate, and theRandom Pay Thereare no signi cant genderdifferences in performance with thepiece rate scheme or therandom pay scheme,the p-value ofthe two-sided Mann-Whitney U testis 0.2023 and 0.165, respectively,the somewhat higher performance of men is notsig- nicant.10 Thereis nosignicant differencein performanceunder thetwo noncompetitive treatments, the random pay and thepiece ratefor men ( p-value 0.6449) orwomen ( p-value 0.6130); the somewhathigher performance under the random pay schemeis notsigni cant. Participants donot change their performance in caseof a randompayment or a certainpayment of the same expected value.We do not nd any evidencethat riskaversion in uences performance.

III.E. Performancein theMixed Tournament Thereis asignicant genderdifference in performancein the mixedtournament: the p-value ofthetwo-sided Mann-Whitney U testis 0.0004; theperformance of menis signicantly higher. III.F.Performance Differences between Competitive and NoncompetitiveIncentive Schemes for Men and Women Men performsigni cantly higherin mixedtournaments than underboth noncompetitive incentive schemes, the piece rate and therandom pay. The p-value ofthe two-sided Mann-Whitney U testthat comparesperformance of men in mixedtournaments with thepiece rate is 0.001, whilefor the comparison to the randompay treatmentit is 0.006. Women donot signi cantly differ in theirperformance in the mixedtournament and thepiece rate scheme, the p-value ofthe

10.Even though men do not signi cantly outperform women, below we will further investigatethe possible implications that men have a somewhathigher performancethan women. (In the piece rate treatment the average performance ofmen is 11.23, and that of women is 9.73. In the random pay treatmentthe averagesare 11.83 and 10.33. All the average performances will be shown in FigureIII). PERFORMANCEIN COMPETITIVE ENVIRONMENTS 1057 two-sided Mann-Whitney U testis 0.62,while it is 0.623 when comparedwith therandom pay. Thesomewhat higher performanceof women in themixed tournament is notsigni cant. Ourresults do not indicate that genderdifferences toward uncertaintyare a driving factorfor the gender gap inperformance in tournaments.Furthermore, the increase in thegender gap in performancebetween the noncompetitive and thecompetitive treatmentis drivenby anincreaseof theperformance of menand basically nochange in theperformance of women. The performanceof women in mixedtournaments is notcharacterized by any,let alone a signicant, group of women reducing their per- formancelevel compared with thenoncompetitive incentive schemes.Women do not“ giveup” when competing against men. Thefact that mensigni cantly changetheir performance in mixedtournaments compared with apiecerate scheme shows that (at leastfor men) mazes are an appropriate taskto study different incentiveschemes. Men do not simply solvemazes for fun,independently ofthe incentive scheme at hand; solving mazesappears torequire real, costly effort.

III.G. MixedTournaments Signi cantly Increase the Gender Gap in Mean PerformanceCompared with NoncompetitiveIncentive Schemes Tomeasure whether we have a signicant treatmenteffect, i.e.,a signicant changein thegender differences in performance betweenthe noncompetitive and thecompetitive treatment, we considerin eachtreatment the gender differences in average performance.The gender gap in meanperformance in thepiece ratescheme is 1.5 (meanperformance of men is 11.23, that of womenis 9.73) comparedwith 4.2 in mixedtournaments (mean performanceof men is 15, that ofwomen is 10.8). Weuse 1000 iterationsof bootstrap to test whether (Gender gap in mean performancein thetournament) 2 (Gendergap in meanperfor- mancein thepiece rate treatment) is strictlypositive against the null hypothesisthat this differenceis lessthan orequal tozero. 11

11.Speci cally, we compute 1000 values for each of thegender gaps in mean performancein the tournament and the piece rate in the following way. For example,to compute the mean performance of menin thepiece rate treatment, we randomlyselect, with replacement, 30 values of male performance out of the 30 valuesfrom our experiment. Doing the same for the women in the piece rate, we computea valuefor the gender gap inthe piece rate. Similarly, we compute a valuefor the gender gap inthetournament. We calculatethe difference between thetwo, and iterate the process 1000 times. 1058 QUARTERLY JOURNALOF ECONOMICS

Wereject the null hypothesisat p 5 0.034.Similarly,the gender gap in meanperformance in therandom pay treatmentis 1.5 (meanperformance of men is 11.83, that ofwomen is 10.33), whichis signicantly smallerthan theone of the mixed tournament at p 5 0.047. Therest of the study will bedevoted to investigate why womendo notincrease on average their performance in tournaments,and in particular why tournamentshave such a signicant impact onthe gender gap in meanperformance.

IV. DO WOMEN COMPETE? Thereare many possible explanations why mixedtourna- mentsresult in asignicantly highergender gap in meanperfor- mancethan thenoncompetitive treatments. We will notprovide an exhaustivelist ofexplanations, but rathercluster them in severalrelevant categories.

IV.A.Women Do not Compete against Men Thereare several explanations why womendo not increase theirperformance in mixedtournaments, while men do, compared with theirperformance in anoncompetitiveenvironment. First,there may be arationalexplanation forthe signi cant increasein thegender gap in meanperformance in tournaments. If womenbelieve (even if incorrectly)that menare somewhat moreskilled in solvingmazes and theytake the gender of their competitorsas asignal oftheir ability (and maybeeven take genderas asignal oftheirown ability), thena manand awoman facea different situationin thetournament. A manhas twomale competitors,and threefemale competitors who are on average lessable than malecompetitors. An equally ablewoman, however,has twocompetitors whose ability is drawn fromthe same distribution as herown, and threemale competitors who are on averageabler than sheis. Therefore, a manand awomanof equal ability havedifferent expectationsabout their relative ability within theset of their competitors. This may lead toa lower expectedperformance of thewoman than ofan equally ableman. Thepsychology literature offers an additional possibleexplanation:women may think that theyare worse than menat solving mazesin competitiveenvironments, beyond possible actual genderdifferences. Furthermore, even if womendo not internal- izea possiblestereotype about being less good at tasks like PERFORMANCEIN COMPETITIVE ENVIRONMENTS 1059 solvingmazes, or performing in competitiveenvironments, their performancemight suffer in suchsituations. The idea is that womenmay experience a “stereotypethreat” that providesan additional sourceof anxietywhile performing the task and leads tohigher instances of “ chokingunder pressure” [Steele 1997]. 12 Theeffect will besimilar to the one where women believe they are lessable than men,and wherethese beliefs are based onactual differences. Theseexplanations forthe performance of women in tourna- mentshinge on the identity ofthe competitors. They imply that theperformance of women in tournamentsis notboosted the sameas that ofmenwhen competing against men,though women mightbe capable ofbeing effective in competitiveenvironments and bemotivated by competitiveincentives. Theresults of our experiments so far alsoallow foranother class ofexplanations, namely that womenmay not be motivated orable tocompete at all,independently ofthe nature of the competitors.

IV.B. WomenDo not Compete at All Theseexplanations focusonly on the ability and behaviorof womenin tournaments(or even in moregeneral incentive environments)per se. First,it mightbe that thecosts of effortfor women are such that increasingthe output would onlybe possible at veryhigh costs.Hence women effectively cannot solve more mazes. A sec- ondexplanation is that womenmight not be sensitive to incentive schemes,at leastwhen the task at hand is solvingmazes. Note that in all theexperimental treatments discussed sofar, the performanceof women did notchange signi cantly. Third, womenmay not like to compete. There are several possible rea- sonsfor such preferences. One is that womenare not socialized to

12.Steele and Aronson [1995] present a typicalexperiment of stereotype threattheory. Black andwhite participants had to take a difcult verbal test. Theirtwo treatments varied the stereotype vulnerability of Black participantsby varying whetheror nottheir performance was ostensibly diagnostic of ability,and thus,whether or notthey were at risk offullling the racial stereotype about their intellectualability. As predicted by stereotype threat theory, Blacks underper- formedin relation to Whites in the ability-diagnostic condition but not in the nondiagnosticcondition, controlling for performance in the Scholastic Aptitude Test.An additionaltreatment shows that the mere salience of the stereotype, by simplyasking participants to indicate their race, can impair the performance of Blacks,even when the test was not diagnostic of ability. Brown andJosephs [1999]have experiments that suggest that positive stereotypes may also be a burdento performance. 1060 QUARTERLY JOURNALOF ECONOMICS compete.A fourthexplanation is that thedecision to not increase performance(and henceeffort) in thetournament as opposedto therandom pay treatmentcan be viewed as apublic good.If all participants believethat theex anteprior for each participant to win is 1/6,then they would all bebetter off if theyex ante committedto the effort level of therandom pay treatment.How- ever,the existence of gender differences in thecontribution of public goodsremains inconclusive (for an overviewsee Eckel and Grossman[2000] and Ledyard [1995]). 13 Thereremains another possible driving factorfor our results.

IV.C. Men Competetoo Much By using arealtask, we forgothe advantage ofbeing able to computethe equilibrium outcome in mixedtournaments. We do notknow whether the behavior of thewomen is the“ puzzle”that requiresan explanation,or thebehavior of men.It mightbe that themen are solving “ toomany” mazes, because they receive an additional benet fromwinning thetournament, or are overcon- dentabout their abilities and hencetheir chances of actually winning thetournament. 14 Toinvestigate these issues, we consider single-sex tourna- mentsof six womenonly and six menonly. The reason to have single-sexexperiments for each gender, and especiallyalso for men,is tocontrol for the possibility that eachgender may only perceiveparticipants ofthesame sex as “real”competitors. How- ever,behavior in tournamentsis affected bythenumber of competitors.Hence, we do notnecessarily want tocompare the performanceof women in single-sextournaments with theperfor- manceof men in mixedtournaments. Thistreatment also tests for the possibility that asignicant componentof men’ s performancein tournamentsis dueto the presenceof women(i.e., men only compete when there are women around,and it is easyto come up with an evolutionarystory for that).

13.Andreoni and Vesterlund [2001] found gender differences in altruism dependingon the costs of providingbene ts. Their predictions for our experimen- talenvironment would be unclear. 14.For an overview of gender differences in overcon dence, and the vast occurrenceof overcon dence, see, e.g., Lichtenstein, Fischhoff, and Phillips [1982]. PERFORMANCEIN COMPETITIVE ENVIRONMENTS 1061

IV.D.Treatment 4: Single-Sex Tournaments In thefollowing treatment we have vesessions of groupsof six womenonly and vesessions of groupsof six menonly. Apart fromthe gender composition of thegroup, everything is thesame as in thetournament treatment: participants have fteenmin- utesto solve mazes. Only theparticipant whosolved the most mazeswill bepaid 12 shekelsfor every maze he orshe solved. In caseof atie,the winners shared the payment equally. The other participants in thegroup did notreceive any paymentadditional tothe show-up fee.Participants would notknow how much other participants earned(i.e., how many mazes they solved and hence theidentity ofthe winner of thetournament).

IV.E. ThePerformance of Men Theperformance of men in single-sextournaments is not signicantly different than in mixedtournaments; the p-value of thetwo-sided Mann-Whitney U testis 0.5630. Thecomparison of performancebetween men in single-sextournaments as opposed tothe piece rate or the random payment is still signicant, the p-values are0.036 and 0.018, respectively. Theperformance of men, even though a bit lowerin single- sexthan in mixedtournaments, is notsigni cantly affected by thegender of theircompetitors.

IV.F.Are Women Competitive? Toinvestigate whether women are competitive, we compare theperformance of women in single-sextournaments with that in thenoncompetitive environments. Theperformance of womenin single-sextournaments is signicantly higherthan in thenoncompetitive treatments. The p-value ofthe two-sided Mann-Whitney U testwhen comparing theperformance in single-sextournaments to the piece rate performanceis 0.0148, whileit is 0.0469 whenusing therandom pay treatmentas thenoncompetitive incentive scheme. So women do reactto tournament incentives and docompete in single-sex groups. However,the former analysis doesnot allow usto determine whetherwomen (in single-sexgroups) areas capable ofcompeting as menare. To do that,we will comparethe performance distri- butionsof men and womenin single-sextournaments. However, wehave seen that evenin thenoncompetitive treatments, men 1062 QUARTERLY JOURNALOF ECONOMICS

FIGURE III AveragesPerformance of the30 Menand 30 Womenin Each oftheTreatments somewhat(though not signi cantly) outperformwomen. There- fore,we want tocompare gender differences in meanperformance acrossall treatments,and seewhether differences in single-sex tournamentsresemble differences in noncompetitiveenviron- mentsor differences in themixed tournament. Thereis nosigni cant genderdifference in performancein thesingle-sex tournament treatment; the p-value ofthe Mann- Whitney U testis 0.135. Thesomewhat higher performance of menis notsigni cant. Second,the gender gaps in meanperformance are 4.2 for Mixed Tournament,1.7 forSingle-Sex Tournament, and 1.5 for PieceRate and Random Pay.To conrm that thereis asignicant reductionin thegender gap in meanperformance when moving frommixed to single-sex tournaments, we run 1000 iterationsof bootstrapon (Men mixed 2 Womenmixed) 2 (Men single-sex 2 Womensingle sex). We nd a p-value of0.082; hencewe have a signicant reductionin thegender gap in meanperformance whenmoving from mixed to single-sex tournaments. Further- more,there is nosigni cant differencewhen comparing the gendergap in meanperformance of the single-sex tournament with thepiece rate (the p-value equals 0.459) orthe random pay treatment(the p-value equals 0.535). FigureIII representsthe average performance of men and womenin all thetreatments. PERFORMANCEIN COMPETITIVE ENVIRONMENTS 1063

In single-sextournaments, women solve more mazes than in mixedtournaments. However, this differenceis notsigni cant. (The p-value ofthe two-sided Mann-Whitney U testis 0.1025. Usinga one-sidedtest of coursemakes the results signi cant at conventionallevels.) Beforewe investigate our data in moredetail, in orderto betterunderstand why womendo not compete against men,we want topoint outthat thereremains one nal possibleexplana- tionfor our results, which has nothingto do with “competitiveness”of women. There is an alternativeexplanation forthe in- creaseof performance of women in single-sextournaments compared with all othertreatments. Maybe womenin single-sex tournamentsare only, or mostly, motivated not by thetournament’s incentives,but by thefact that thereare no male participants presentin theexperiment. Therefore, we need to test for any possibleeffect of “absenceof maleparticipants.” Thenew psychology literature on stereotypethreat suggests that womenin mixed-sexenvironments may be more alert to theirgender, and hencemore prone to stereotype threat and reducedperformance. However, the one study testingthis assertion[Inzlicht and Ben-Zeev2000] did notsimply havemen and womenperform a task,but madeclear that theperformance of eachparticipant would beannouncedpublicly, therebycreating a competitiveenvironment. Indeed, the authors nd agendergap in performanceon math GRE questionsin mixedgender groups, but notin single-sexgroups. IV.G.Treatment 5: Single-Sex Piece Rate Payment Thistreatment mimics the “ mixed”Piece Rate treatment,but thegroup is homogeneous:either only six menor six women. Participants weretold that theyhave fteenminutes to solve mazes.Their reward consists of 2 shekelsfor every maze they solved.Participants would notknow how much other participants earned(i.e., how many mazes they solved). We conducted two sessionsfor each gender. For women the average performance in thesingle-sex piece rate is 10, whileit is 9.73 in themixed piece rate,10.33 in themixed random pay, and 12.6 in single-sex tournaments.The p-value ofthetwo-sided Mann-Whitney U test whencomparing the single-sex piece rate results of women to theirmixed piece rate is 0.83.The p-value ofthetwo-sided Mann- Whitney U whencomparing the single-sex piece rate results of womento their single-sex tournaments performance is 0.13.For 1064 QUARTERLY JOURNALOF ECONOMICS themen, the average performance in single-sexpiece rates is 11.08, comparedwith 11.23 in mixedpiece rates and 14.3 in single-sextournaments. The respective p-values ofthetwo-sided Mann-Whitney U testare 0.77 and 0.05. Giventhe average performance of women in thedifferent treatments,we conclude that theincrease in performanceof womenin single-sextournaments is dueto the incentive scheme and notthe absence of maleparticipants.

V. THE PERFORMANCE OF MEN AND WOMEN IN MORE DETAIL Wenow show how the average experiences from Figure III translateinto individual behavior. Specically, we consider for each decile the proportion of womenamong all theparticipants whoseperformance ranks themabove this decile. 15 Forthe single-sex tournament we pool theobservations of menand women.The gureshows, for example,that if thetop 40 percentof subjectswere to be selected based onperformance in mixedtournaments, this would resultin a femalerepresentation of 0.24.On theother hand, if theselection werebased oneither performance in single-sextournaments or underpiece rate, the representation of femaleswould behigher, around0.4. Figure IV alsosuggests that (apart frompossibly the highestperformance group), women do notreceive the same boost in performanceas menwhen moving to a mixedtournament. Thefact that theproportion of womenamong high perform- ersin single-sextournaments mimics the proportion under piece ratesis anotherindicator that women,when competing among themselves,receive a boostin performancefrom competition in single-sextournaments. Mixed tournaments,however, result in a lowerrepresentation of womenamong all performancedeciles but the rstand secondone. V.A.Do Men and WomenIncrease their Performance in the Same Way? Wewant topresent some simple calculations, to estimate whetherthe performance of women increases in thesame way as

15.When deciding about the gender of participants to include among all of thosewhose performance is exactly on the decile (there is in general more than oneparticipant whose performance ranks them,e.g., tenth), we include men and womenproportionally (according totheir representation among participants whoseperformance is exactly the decile performance). PERFORMANCEIN COMPETITIVE ENVIRONMENTS 1065

FIGURE IV ForEach Treatment,the Proportion of Womenabove Each PerformanceDecile

men’s performancewhen moving from noncompetitive incentive schemesto competitive incentive schemes. Tohave an estimateof the increase in performanceof men, whenmoving from the noncompetitive treatments to the mixed tournament,we compare the performance of (different) men acrosstreatments. 16 Consider,for example, a manwho solved, say, fteenmazes in thenoncompetitive treatments. This means that amongthe 60 menin thenoncompetitive treatments, he is thetwelfth toseventeenth highest performing participant. To estimatehis performancein themixed tournament, we consider theperformance of men who are the sixth toninth highestper- formersamong the 30 menin themixed tournament. Their performanceis 19, 18, 17, and 17 mazes.Therefore, we conclude that amanwho solves fteenmazes in thenoncompetitive treatments solves(at least) seventeenin themixed tournament. If womenreceive the same boost in performanceas men whenmoving from a noncompetitivetreatment to a mixedtournament,a womanwho solved fteenmazes in thepiece rate treatmentshould solve(at least) seventeenmazes in themixed tournament.

16.We poolthe two noncompetitivetreatments, as otherwise,there are some performancevalues that are missing. For the following analysis, we do not distinguishbetween a randomor apiecerate performance. 1066 QUARTERLY JOURNALOF ECONOMICS

Weperformthis analysis forevery number of mazessolved. 17 Thisyields an “expectedmixed tournament” performance of 60 women.This performance is higherthan theactual performance ofthe 30 womenin themixed tournament. The p-value ofthe two-sided Mann-Whitney U testthat comparesthis “expected mixedtournament” performance with theactual mixedtourna- mentperformance is 0.003, whichshows that womenincrease theirperformance signi cantly lessthan menwhen moving from noncompetitiveenvironments to mixed tournaments. Therecould be a goodreason why amanand awomanwho solvethe same number of mazes in thenoncompetitive environ- mentsperform differently in mixedtournaments: they actually face“ different”competitors. A manfaces two male and three femalecompetitors, whereas a womanfaces three male competi- torsand twofemale competitors. We have seen that theperfor- manceof womenis slightly lowerthan that ofmen,so menfacean “easier”competition than women. Considera manand awomanwho solved fteenmazes in the noncompetitivetreatments. For each of them randomly select a groupof menand women(among the participants ofthenoncom- petitivetreatments) so that theman and thewoman are each in adifferent groupof three men and threewomen. The man who solved fteenmazes has aprobability of41 percentto be the highestperforming participant amonghis group.The woman, however,has onlya chanceof 32 percentof being the highest performingparticipant in hergroup. Maybe awomanwho has a 32 percentchance of beingthe highest performing participant in agroupof three men and threewomen performing in thenon- competitivetreatments (and whosolved fteenmazes) should increaseher performance as muchas amanwho has a32 percent probability ofbeing the highest performing participant (and solvesmaybe less than fteenmazes). It turnsout that aman whosolved fourteen mazes has achanceof 31 percentof beingthe highestperformer in amixedgender group. Therefore, one may argue,that thewoman who has a32 percentchance of beingthe highestperforming participant in agroupof threemen and three womenusing thenoncompetitive treatment (and whosolved f- teenmazes), should increaseher performance as muchas aman

17.In case the equivalent performance of men is missing, we use the next highestperforming man as acomparison. PERFORMANCEIN COMPETITIVE ENVIRONMENTS 1067 whohas a31 percentchance of being the highest performing participant (and whosolved fourteen mazes). It turnsout that forall performancelevels a womanwho solved x mazesalways has ahigherchance of being the highest performingparticipant in arandomlychosen mixed gender group than amanwho solved x 2 1mazesin thenoncompetitive treatments. 18 Therefore,a womanwho solved x mazes in the noncompetitivetreatments, has ahigherprobability ofbeing the highestperforming participant in hergroup, and has ahigher ability than amanwho solved x 2 1mazesin thenoncompetitive treatment.If awomanand amanwho have an equalchance of beingthe highest performing participant in amixedgender group undernoncompetitive incentive schemes receive the same boost in performance,then a womanwho solved x mazesmay be ex- pectedto increase her performance as muchas amanwho solved x 2 1mazesin thenoncompetitive treatment. Using the same strategyas beforeto determine the boost of menwhen going from thenoncompetitive treatments to the mixed tournaments, we computean “expectedmixed tournament” performance of 60 women.This performance is higherthan theactual performance ofthe 30 womenin themixed tournament, the p-value ofthe two-sided Mann-Whitney U is 0.04. Therefore,it seemsthat thelow performance of women in mixedtournaments cannot be solely explained by thehypothesis that amanand awomanof thesame ability performdifferently in mixedtournaments, solely because the woman faces a tougher competitionthan theman. Thereare several other reasons why womenand menof the sameability maybehave differently in mixedtournaments. It maybe that menand womenknow nothing about their own ability, but areaware of possiblegender differences in thedistri- butionof ability. Usingthe performances from the piece rate treatment,the random pay treatmentand thesingle-sex tournaments(where we pool the men and thewomen), a manand a womanin agroupof threemen and threewomen faces differences of0.07 to0.1 in beingthe highest performing participants in their group.These differences in probabilities ofbeing the ablest par-

18.However, the woman indeed has a lowerchance of being the highest performingparticipant in arandomlychosen mixed gender group thana manwho solved x mazes. 1068 QUARTERLY JOURNALOF ECONOMICS ticipant maywarrant theobserved differences in behaviorof womenand menin mixedtournaments. Anotherpossibility maybe that womenunderestimate their competencerelative to men, so that in principle womenmay receivethe same boost in performanceas men,but theydo not estimatetheir ability tobe as high asthat ofan equally able man. In ourlast experimentwe try to measure whether men and womenfeel differently competentin solvingmazes. There is a largepsychology literature that showsthat all peopleare over- condent with respectto their ability, but,maybe men even more sothan women(e.g., Beyer [1990], Lundeberg,Fox, and Puncco- har[1994], and Beyerand Bowden[1997]). Specically, we measure whether men and womenwould makedifferent choiceswhen they can choosethe dif culty level at whichthey will performthe task and in whichthey will be evaluated.In thenext treatment we have subjects choosing the difculty level of the mazes they will solve.Dweck and Leggert [1988] providea goodoverview on the relation between task choiceand feelingsof competence.

V.B.Treatment 5: Choice of the Level of Dif culty Participants weretold that theyhave fteenminutes to solve mazes.At thebeginning of the fteenminutes (after experiencing solvingone maze at level2 as describedabove), they were asked to xthelevel of difculty for the entire experiment. The payment was afunctionof the dif culty level: participants whochose level 1werepaid 1shekelfor every maze solved, those who chose level 2werepaid 2shekelsfor each maze, and soon. Participants do notlearn the choices or earnings of other participants. Notethat participants did notexperience the other dif culty levelsbefore setting the level for the entire experiment. Their optimal choicewill thereforedepend ontheirestimated ability in solvingmazes, on their estimate of the actual difculty of each level,and ontheir risk and ambiguity aversion.If menand womendo not differ in theserespects, then we expect males and femalesto chose similar levels of difculty after solving one maze oflevel 2. Figure V presentsthe distribution ofchoices.The mean ofthe choices is 3.4 formales and 2.6 forfemales. This difference is statistically signicant (the p-value equals 0.0065). If weassume that all participants thinkthat highlevels of ability should lead tooptimal choicesof higher dif culty, and thereis nogender difference in riskor ambiguity aversion,then PERFORMANCEIN COMPETITIVE ENVIRONMENTS 1069

FIGURE V Choiceof Dif culty Level Thehorizontal axis corresponds to the dif culty level,and the height of each bar reportsthe percentage of the 30 male and 30 female participants, respectively, whochose that dif culty level. it seemsclear that menfeel more competent than women.The psychologyliterature has identied that higherchoices of dif - cultyare associated with higherfeelings of competence.

VI. THE EFFECT OF TOURNAMENTS Themean performance of pooled women and menin mixed tournamentsis 12.95 as opposedto 13.47 in single-sextournaments;this differenceis notsigni cant (the p-value equals 0.62). Performancein tournaments(mixed and singlesex) is signicantly higherthan underrandom pay ( p-values of0.032 and 0.0046 forcomparison with mixedand single-sextournaments, respectively),and undera piecerate ( p-values of0.073 and 0.0008 forcomparison with mixedand single-sextournaments, respectively).Hence it is evidentthat tournamentincentives havea strongimpact onperformance. 19 Theresult is relatedto the nding ofNalbantian and Schot- ter[1997], who ndthat themean performance of theirsubjects was highestwith competitivepayment: see the section signi - cantly titled “ALittleCompetition Goes a Long,Long Way.” Thereare interesting differences, however. They study theeffect ofgroup incentive schemes on groupperformance, while we focus onindividual incentivesand behavior.Their subjects have noth-

19.The average payment per maze is 2.996in mixed and 3.044 in single-sex tournaments(as opposed to 2 underthe piece rate and the random payment). 1070 QUARTERLY JOURNALOF ECONOMICS ing toprove: the outcome does not depend onany skillor talentof thesubject. Even the effort is simply amonetaryinput, notany realpsychological and effortcost. While the setup ofNalbantian and Schottermay seem to provide a moredirect control over the decisionof the subjects, it alsoeliminates the psychological as- pects(self-con dence) that areat thecenter of ourstudy. Tournamentsare not only used to provide incentives, but alsoto determine very high performing participants. Therefore, tocompare single-sex and mixedtournaments, we also want to comparethe performance of the winning participants in each case. Inthemixed tourname nttheten winners were seven men, twowomen, and onetourname ntendedin atiebetween a man and awoman.The average performa nceof theseten winners is 19.4.In theten single-se xtournaments wehave of course (by design) vemen and vewomen who win. Their average performanceis 20.5.In orderto test whether there is asignicant differencein performanceof the winners, we run 1000 iterationsof bootstrap .Theaverage performan ceof winners in single-sextourname nts is 20.5 whichis notsigni cantly dif- ferentfrom the average in mixedtourname nts 19.26: ( p-value is 0.52).

VII. DISCUSSION AND CONCLUSION Weconducted controlled experiments to test the hypothesis that menand womenreact differently tocompetitive incentive schemeswhen competing against oneanother. When participants arepaid apiecerate, there is nosigni cant genderdifference in performance.Our main nding is that using tournamentincen- tivesin mixedgender groups resulted in asignicant increase relativeto the benchmark in performanceof male participants, but notof female participants. As aresult,we observe a signicant gendergap in tournaments.We show that this differenceis notdue to the uncertainty of the payment in tournaments, throughgender differences in riskaversion. To understand a possiblereason for this gendergap, weinvestigate whether womendo not show an increasein performancein competitive environmentsper se, or only when competing against men.We ransingle-sex tournaments where women (and men)still haveto performin acompetitiveenvironment, though now compete only PERFORMANCEIN COMPETITIVE ENVIRONMENTS 1071 against theirown gender. This results in an increasein mean performanceof womenand adecreasein thegender gap in mean performance. Severalreasons may account for those results. Note that in all treatmentson average men slightly outperformwomen. This canlead togender differences in optimalperformance in mixed tournaments.The reason is that menface only two male competitors,whereas women face three male competitors. There might be an additional effectthat womenfeel less competent than men (beyondwhat would bewarranted by theslight maleadvantage). Ourlast experimentprovides support forthe conjecture that womenfeel less competent than menin theirability tosolve mazes. Whetherthe poor performance of women relative to men in mixedgender group tournaments is arationalresponse or a psychologicalphenomenon, our results show that single-sextour- namentselicit more comparable performance from women and men.Furthermore, in ourexperiments, running single-sex as opposedto mixed tournaments came at nocost. The performance ofthe winners of single-sex tournaments is nolower than ofthe winnersof mixed-sex tournaments (even though the winners of thesingle-sex tournaments are constrained to be always half womenand half men). Gneezyand Rustichini [2002] found genderdifferences in competitionwith youngchildren (nine to ten years of age). In theirexperiment, the children rstrun separately, in whichcase thespeed of girls is thesame as that ofboys. Then children are matchedin pairs accordingto their performance (which resultsin somemixed and somesame sex pairs), and runa secondtime. Competitionhas apositiveeffect on performance. This effect is strongeron boysthan it is ongirls,and thegender composition of thecompeting pair is important.An importantdifference in the resultsis that girls aremotivated when competing against boys, but whentwo girls arematched, performance does not improve. However,the setup differs in severalways. First, there is continuousfeedback on (relative) performance; second, competing chil- drenare matched according to their original performance (and this is commonknowledge); third, the subjects are small children (with onlyan intrinsicmotivation); and nally thetask is physi- cal ratherthan mental.Both the continuous feedback, and the fact that thechildren know that theyare in ability matchedpairs, 1072 QUARTERLY JOURNALOF ECONOMICS would eliminatethe reasons we provide for the lower performanceof women in mixedtournaments. 20 Whilethe reasons for the attrition rate of women in science and engineeringremain unclear, there exists mounting evidence that thewomen’ s lowfeelings of condence and competenceplay akeyrole. A recentreport titled “Women’s Experiencesin College Engineering”[Goodman, Cunningham, and Lachapelle2002] showsthat womenare not dropping outof engineeringprograms becauseof poor performance. Many womenwho left mentioned negativeaspects oftheir school’ s climatesuch as competition, lackof support, and discouragingfaculty and peers.Positive perceptionsof self-condence were highly associatedwith staying in theprogram, and increasedwith theexistence of mentor programs,opportunities for networking with practicing femaleengi- neersand clubs likethe society for Women Engineers. In general, condence in one’s abilities and optimismhave been shown to be stronglyrelated to academic performance [Chemers, Hu, and Garcia 2001]. Furthermore,in male-dominatedgraduate programs,female students showlower feelings of competence than malestudents show[Ulku-Steiner, Kurtz-Costes, and Kinlaw 2000]. Ourexperiments also allow foran analysis ofthe impact of different incentiveschemes when participants arerequired to providereal effort. We observe a signicant increasein mean performancewhen moving from a noncompetitivescheme, such as apiecerate (or the random payment), to competitive schemes, suchas themixed and single-sextournaments. Furthermore, single-sextournaments are as effectiveas mixedtournaments in elicitingperformance of all participants and in termsof eliciting high performanceof the winners of the tournaments.

THE UNIVERSITY OF CHICAGO, GRADUATE SCHOOL OF BUSINESS, AND TECHNION STANFORD UNIVERSITY UNIVERSITY OF MINNESOTA

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