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Gender differences in bargaining outcomes: A field experiment on discrimination

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Author Info

  • Castillo, Marco
  • Petrie, Ragan
  • Torero, Maximo
  • Vesterlund, Lise

Abstract

Relying on a commonly used fixed-offer bargaining script we examine gender differences in bargaining outcomes in a highly competitive and frequently used market: the taxi market in Lima, Peru. Our bargaining script secures that only the seller can change prices and terminate negotiations, thus we are able to examine differences in the seller's entire path of negotiation and in the reservation price at which they are willing to trade. We find that male and female passengers who use the same bargaining script are not treated equally. Men face higher initial prices, final prices, and rejection rates. These differences are consistent with male drivers being more reluctant to give-in to demanding negotiations by male passengers, and with male passengers being perceived as having high valuations. To identify whether taste-based or statistical discrimination drives the inferior treatment of men we conduct an experiment where passengers send a signal on valuation before negotiating. The signal eliminates gender differences and the response is shown only to be consistent with statistical discrimination. Thus in the limiting case of a highly competitive market with experienced traders, we do not find evidence of taste-based discrimination, the differential observed is however consistent with statistical discrimination.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 99 (2013)
Issue (Month): C ()
Pages: 35-48

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Handle: RePEc:eee:pubeco:v:99:y:2013:i:c:p:35-48

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Web page: http://www.elsevier.com/locate/inca/505578

Related research

Keywords: Bargaining; Discrimination; Statistical inference; Gender;

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References

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  1. Drew Fudenberg & David K. Levine & Jean Tirole, 1987. "Incomplete Information Bargaining with Outside Opportunities," Levine's Working Paper Archive 229, David K. Levine.
  2. Matthias Sutter & Ronald Bosman & Martin Kocher & Frans van Winden, 2008. "Gender pairing and bargaining ? Beware the same sex!," Working Papers 2008-27, Faculty of Economics and Statistics, University of Innsbruck.
  3. Castillo, Marco & Petrie, Ragan, 2010. "Discrimination in the lab: Does information trump appearance?," Games and Economic Behavior, Elsevier, vol. 68(1), pages 50-59, January.
  4. P. A. Riach & J. Rich, 2002. "Field Experiments of Discrimination in the Market Place," Economic Journal, Royal Economic Society, vol. 112(483), pages 480-518, November.
  5. Loukas Balafoutas & Adrian Beck & Rudolf Kerschbamer & Matthias Sutter, 2013. "What Drives Taxi Drivers? A Field Experiment on Fraud in a Market for Credence Goods," Review of Economic Studies, Oxford University Press, vol. 80(3), pages 876-891.
  6. Eckel, Catherine C & Grossman, Philip J, 2001. "Chivalry and Solidarity in Ultimatum Games," Economic Inquiry, Western Economic Association International, vol. 39(2), pages 171-88, April.
  7. John A. List, 2004. "The Nature and Extent of Discrimination in the Marketplace: Evidence from the Field," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 49-89, February.
  8. Ayres, Ian & Siegelman, Peter, 1995. "Race and Gender Discrimination in Bargaining for a New Car," American Economic Review, American Economic Association, vol. 85(3), pages 304-21, June.
  9. James Andreoni & Marco Castillo & Ragan Petrie, 2003. "What Do Bargainers' Preferences Look Like? Experiments with a Convex Ultimatum Game," American Economic Review, American Economic Association, vol. 93(3), pages 672-685, June.
  10. Gunderson, Morley, 1989. "Male-Female Wage Differentials and Policy Responses," Journal of Economic Literature, American Economic Association, vol. 27(1), pages 46-72, March.
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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Gender Differences in Bargaining Outcomes: A Field Experiment on Discrimination
    by Maximo Rossi in Wikiprogress América Latina on 2012-06-04 13:59:00
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Cited by:
  1. Loukas Balafoutas & Rudolf Kerschbamer & Matthias Sutter, 2013. "Second-Degree Moral Hazard in a Real-World Credence Goods Market," CESifo Working Paper Series 4458, CESifo Group Munich.
  2. Adeline Delavande & Basit Zafar, 2013. "Gender discrimination and social identity: experimental evidence from urban Pakistan," Staff Reports 593, Federal Reserve Bank of New York.
  3. Card, David & Cardoso, Ana Rute & Kline, Patrick, 2013. "Bargaining and the Gender Wage Gap: A Direct Assessment," IZA Discussion Papers 7592, Institute for the Study of Labor (IZA).
  4. Meghan R. Busse & Ayelet Israeli & Florian Zettelmeyer, 2013. "Repairing the Damage: The Effect of Price Expectations on Auto-Repair Price Quotes," NBER Working Papers 19154, National Bureau of Economic Research, Inc.
  5. Deryugina, Tatyana, 2013. "When Are Appearances Deceiving? The Nature of the Beauty Premium," MPRA Paper 53581, University Library of Munich, Germany.
  6. Butler, Jeff & Giuliano, Paola & Guiso, Luigi, 2012. "Trust and Cheating," CEPR Discussion Papers 9202, C.E.P.R. Discussion Papers.
  7. Mujcic, Redzo & Frijters, Paul, 2013. "Still Not Allowed on the Bus: It Matters If You're Black or White!," IZA Discussion Papers 7300, Institute for the Study of Labor (IZA).

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