Using 'Piece‐Rate Equivalents' and Relative Payoffs to Explore Gender Differences in the Willingness to Compete

Laboratory experiments have demonstrated that men are significantly more willing to compete than women given a binary choice between a Piece‐Rate (PR) and Winner‐Take‐All (WTA) payment in stereotypically‐male tasks. This difference is ascribed to variant overconfidence and preference for competition, and is believed to have a profound impact on the market for highly‐competitive jobs, where women are underrepresented. In this paper, we develop a new instrument to measure the willingness to compete by offering subjects a series of PR payments ranging from 0 to 100 percent of the WTA payment, which enable us to identify the PR equivalent of a $2.00 WTA payment; that is, the value of the $2.00 WTA payment. We find that women value WTA payments significantly less than men, about $0.28 less; and that women require a premium (relative to men) of about 40 percent to compete. Our new instrument is more sensitive than the traditional binary‐choice instrument, as it classifies the willingness to compete into 21 categories. This enable us to identify relationships that are not identifiable using the binary‐choice instrument. For example, we find that subjects who are the most willing to compete also have high ability on average; and that there is a positive relationship between the willingness to compete and GPA for men (not for women), and a positive relationship between the willingness to compete and taking STEM courses for women (not for men)