Experimental Economics Seminar - Ragan Petrie (Texas A&M and The University of Melbourne)

Title: Gender Differences in Negotiation by Communication Method

Authors: Ragan Petrie (Texas A&M University, Melbourne Institute) and Adam Greenberg (Bocconi University)

Abstract: Women occupy few of the top positions in business, government and academics and have average earnings that are a fraction of men’s. Positions that pay well tend to require negotiation skills to get the job and to perform well on the job. On average, studies have found that women are less likely to enter a negotiation than men, and when they do negotiate, they obtain worse outcomes than men in a variety of settings. Most of these results are based on face-to-face negotiations in hypothetical or low-payoff consequence environments. With the myriad of acceptable forms of communication available (e.g., online written messages, text chat, phone calls, video, face to face), it is unclear if differences in negotiation outcomes will remain when gender cues and expectations are mitigated or eliminated when environments are less socially rich. We use economic experiments and systematically vary the communication mode (i.e., anonymous written message, written message with photos, audio, and video) to examine gender differences in outcomes when individuals must negotiate to realize payoffs. Our results show that when gender is known, women earn less than men from the negotiation, but when gender cues are eliminated, women’s outcomes are identical to men’s. These results suggest that it may not be that women do not like to negotiate per se but they do not like to do so when gender is salient.