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Gender Differences in Bargaining Outcomes: A Field Experiment on Discrimination

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  • Marco Castillo
  • Ragan Petrie
  • Máximo Torero
  • Lise Vesterlund

Abstract

We examine gender differences in bargaining outcomes in a highly competitive and commonly used market: the taxi market in Lima, Peru. Examining the entire path of negotiation we find that men face higher initial prices and rejection rates. These differentials are consistent with both statistical and taste-based discrimination. To identify the source of 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. Our study secures identification within the market of interest and demonstrates that there are environments where sophisticated statistical inference is the sole source of differential gender outcomes.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18093.

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Date of creation: May 2012
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Publication status: published as Castillo, Marco & Petrie, Ragan & Torero, Maximo & Vesterlund, Lise, 2013. "Gender differences in bargaining outcomes: A field experiment on discrimination," Journal of Public Economics, Elsevier, vol. 99(C), pages 35-48.
Handle: RePEc:nbr:nberwo:18093

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  1. Balafoutas, Loukas & Beck, Adrian & Kerschbamer, Rudolf & Sutter, Matthias, 2011. "What Drives Taxi Drivers? A Field Experiment on Fraud in a Market for Credence Goods," IZA Discussion Papers 5700, Institute for the Study of Labor (IZA).
  2. Fudenberg, Drew & Levine, David K & Tirole, Jean, 1987. "Incomplete Information Bargaining with Outside Opportunities," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 102(1), pages 37-50, February.
  3. Eckel, Catherine C & Grossman, Philip J, 2001. "Chivalry and Solidarity in Ultimatum Games," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 39(2), pages 171-88, April.
  4. John List, 2004. "The nature and extent of discrimination in the marketplace: Evidence from the field," Natural Field Experiments, The Field Experiments Website 00299, The Field Experiments Website.
  5. Ayres, Ian & Siegelman, Peter, 1995. "Race and Gender Discrimination in Bargaining for a New Car," American Economic Review, American Economic Association, American Economic Association, vol. 85(3), pages 304-21, June.
  6. P. A. Riach & J. Rich, 2002. "Field Experiments of Discrimination in the Market Place," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 112(483), pages 480-518, November.
  7. Castillo, Marco & Petrie, Ragan, 2010. "Discrimination in the lab: Does information trump appearance?," Games and Economic Behavior, Elsevier, Elsevier, vol. 68(1), pages 50-59, January.
  8. Sutter, Matthias & Bosman, R. & Kocher, Martin G. & van Winden, Frans, 2009. "Gender pairing and bargaining-Beware the same sex!," Munich Reprints in Economics, University of Munich, Department of Economics 18217, University of Munich, Department of Economics.
  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, 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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  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, Federal Reserve Bank of New York 593, Federal Reserve Bank of New York.
  3. Deryugina, Tatyana, 2013. "When Are Appearances Deceiving? The Nature of the Beauty Premium," MPRA Paper 53581, University Library of Munich, Germany.
  4. Jeffrey Butler & Paola Giuliano & Luigi Guiso, 2012. "Trust and Cheating," EIEF Working Papers Series 1213, Einaudi Institute for Economics and Finance (EIEF), revised Oct 2012.
  5. 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).
  6. 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).
  7. 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.

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