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Risk Taking and Gender in Hierarchies

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  • Scotchmer, Suzanne

Abstract

If promotion in a hierarchy is based on a random signal of ability, rates of promotion are affected by risk-taking. Further, the statistical properties of the surviving populations of risk-takers and non-risk-takers will be different, and will be changing throughout the hierarchy. I define promotion hierarchies with and without memory, where memory means that promotion depends on the entire history of success. In both types of hierarchies, surviving risk-takers have lower average ability than surviving non risk-takers at any stage where they have a higher probability of survival. However, that will not apply in the limit. With a common set of promotion standards, risk-takers will survive with lower probability than non risk-takers, and will have higher average ability. I give several interpretations for how these theorems relate to affirmative action, in light of considerable evidence that males are more risk-taking than females.

Suggested Citation

  • Scotchmer, Suzanne, 2006. "Risk Taking and Gender in Hierarchies," Department of Economics, Working Paper Series qt2tm5m16f, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  • Handle: RePEc:cdl:econwp:qt2tm5m16f
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    References listed on IDEAS

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    Cited by:

    1. George-Levi Gayle & Limor Golan & Robert A. Miller, 2012. "Gender Differences in Executive Compensation and Job Mobility," Journal of Labor Economics, University of Chicago Press, vol. 30(4), pages 829-872.
    2. Calsamiglia, Caterina & Franke, Jörg & Rey-Biel, Pedro, 2013. "The incentive effects of affirmative action in a real-effort tournament," Journal of Public Economics, Elsevier, vol. 98(C), pages 15-31.
    3. María Paz Espinosa & Javier Gardeazabal, 2013. "Do Students Behave Rationally in Multiple Choice Tests? Evidence from a Field Experiment," Journal of Economics and Management, College of Business, Feng Chia University, Taiwan, vol. 9(2), pages 107-135, July.

    More about this item

    Keywords

    labor markets; promotion; discrimination; affirmative action; hierarchy; risk taking; gender bias;

    JEL classification:

    • J7 - Labor and Demographic Economics - - Labor Discrimination

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