Gender differences in strategic and risky environments

Abstract

We analyze experimental results obtained from the ultimatum game framed as a situation of salary negotiation. First, we frame ultimatum bargaining as a situation of salary negotiation. Second, we introduce a real task which has to be performed by employee-subjects as a consequence of accepting a given salary. We show that real effort raises salaries. In fact, this result is due to both higher salary offers by employers and higher rejection rates by employees. Besides, we study gender differences in individual decision making under uncertainty using the lottery panel test introduced in Sabater-Grande and Georgantzís (2002). Regarding risk aversion, our results confirm that female subjects are more risk averse than males. Regarding sensitivity to risk, female subjects are less attracted than men by the linear risk premia used in the design of the four panels. Our evidence suggests that gender and risk-related effects in ultimatum bargaining can and should be disentangled as two separate idiosyncratic dimensions. Specifically, although we confirm the broadly accepted result that females are more risk averse than males, we find that offers made by females are lower than those posted by male subjects. In fact, the gender effect becomes stronger once risk attitudes are accounted for. Gender effects are found to depend also on cultural differences. In sessions with Greek and Spanish subjects we obtain gender differences of the same sign and similar sizes, whereas British females' behavior differs from that of males only in the case of employee subjects and in the opposite direction to the gender effect reported on subjects from the two Mediterranean countries.