Why Female Decision-Makers Shy away from Promoting Competition

Incentivizing subordinates is a crucial task of anyone in a decision-making role. However, little is known about the mechanisms behind selection of different types of incentives. Our laboratory experiment characterizes the ways in which male and female decision-makers assign incentives, and how these choices are perceived by those affected by them. We find that women are significantly less likely to select “competitive” incentives based on comparative performance of workers, particularly in the treatment where their workers can observe their gender. The results are not due to priming but are rather consistent with the explanation that women conform to gender stereotypes in anticipation of subsequent evaluation by workers. Indeed, female decision-makers are significantly underrated relative to comparable males, even after controlling for incentive choice and an extensive set of individual characteristics. The gender difference in competency ratings can be attributed to male workers rating female decision-makers disproportionately lower relative to their male counterparts. The gender gap in ratings appears to arise because of gender per se and not due to a differential impact of incentives on decision-makers' gender.