Women are as competitive as men

As researchers investigate reasons for America's persistent gender wage gap, one possible explanation that has found favor over the last decade is that women may be less competitive than men, and are therefore passed over for higher-ranking roles with larger salaries.

But a new study suggests that it's likely not that simple—is it ever? Researchers found that women enter competitions at the same rate as men—when they have the option to share their winnings with the losers.

The study is published in the journal Proceedings of the National Academy of Sciences.

What the researchers say: “If we're finally going to close the gender pay gap, then we have to understand the sources of it—and also solutions and remedies for it,” said the lead author

In 2021, women will earn 82 cents for every dollar earned by men meaning women work nearly three months extra to receive the same amount of pay. This statistic does not account for certain characteristics, such as an employee's age, experience or level of education.

But even when considering those characteristics, women are still paid about 98 cents for every dollar earned by men. In other words, a woman is paid 2% less than a man with the same qualifications.

Economists have considered a few possible explanations for this. One theory, known as the “human capital explanation,” suggests that there are gender differences in certain skills, leading women to careers that pay less. Another theory—perhaps the most widely considered—is simply discrimination.

The researchers zeroed in on the theory that women are less competitive and less willing to take risks than men.

But if women were more reluctant to compete, then they would occupy fewer high-ranking positions at the tops of major companies, and that's not the trend that's taken shape over the last several years, they said. Women make up about 8% of the CEOs leading Fortune 500 companies. While that number is low overall, it's a record high.

“We thought it must be the case that women are as competitive as men, but they just exhibit it differently, so we wanted to try to get at that story and demonstrate that that is the case,” they added. “Because that's then a very different story about the gender wage gap.”

The researchers randomly assigned 238 participants—split evenly by gender—to two different groups for the study. Participants in each of those two groups were then randomly assigned to four-person subgroups.

For all participants, the first round of the study was the same: Each was asked to look at tables of 12 three-digit numbers with two decimal places and find the two numbers that add to 10. Participants were asked to solve as many tables as possible—up to 20—in two minutes. Each participant was paid $2 for every table they solved in the first round.

In round two, participants were asked to do the same task, but the two groups were incentivized differently. In the first group, the two participants in each four-person team who solved the most tables earned $4 per table solved, while their other two team members were given nothing. In the other group, the top two performers of each four-person team also earned $4 per table, but they had the right to decide how much of the prize money to share with one of the lower performing participants.

In the third round, all participants were allowed to choose which payment scheme they preferred from the two previous rounds. For half the study participants, this meant a choice between a guaranteed $2 per correct table, or potentially $4 per correct table if they became one of the top-two performers in their four-person subgroup. For the other half of the participants, the choice was $2 per correct table, or $4 per correct table for the top-two performers with the option to share the winnings with one of the losing participants.

The number of women who chose the competitive option nearly doubled when given the option to share their winnings; about 60% chose to compete under that option, while only about 35% chose to compete in the winner-take-all version of the tournament. A clear majority of men chose the winner-take-all option.

The researchers have a few theories about why women are more inclined to compete when they can share the winnings. One suggests female participants are simply interested in controlling the way the winnings are divvied up among the other participants.

Another theory that has emerged among evolutionary psychologists suggests that female participants may be inclined to smooth over bad feelings with losers of the competition.

“We really have to ask what it is about this social incentive that drives women to compete. We think it's recognizing the different costs and benefits that come from your different biological and cultural constraints,” the lead researcher said. “But at the end of the day, I think we still have this question.”

The researchers suggest that corporations might do well to engage in more socially responsible activity.

“Maybe you'll attract a different set of applicants to your CEO positions or your board of director positions,” she said. “Women might be more attracted to positions where there is this social component that isn't there in more traditional, incentive-based firms where it's all about CEO bonuses.”

So, what? Almost all the research that has been carried out over the past few years has made two things very clear:

1. The level of salary and bonuses given to the CEOs of most publicly listed businesses (even to those whose decisions and leadership style cause their companies to run at a loss) is obscene and one of the reasons that the US and other countries have now reached .8 (out of 1) on the Gini inequality scale (meaning that they are heading for failure, break-up or civil war).
2. Women, if allowed to be true to their nature, make better leaders than men. In fact, of the five currently active best leaders I know, three are women. I’m pleased to say all 5 are tribe members.

Women have had to fight hard to get where they are and even now there is a considerable male (and some female) backlash to the advancement of women in the US and elsewhere. Consider that up until just about 100 years ago only Australia and New Zealand gave women the same franchise rights as men.

For more on women leaders click here. For more on competition click here.