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Gender Differences in Bargaining Outcomes: A Field Experiment on Discrimination

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 University of Pittsburgh, Department of Economics in its series Working Papers with number 450.

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Date of creation: Jan 2011
Date of revision: Jan 2011
Handle: RePEc:pit:wpaper:450
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  1. repec:tpr:qjecon:v:119:y:2004:i:1:p:49-89 is not listed on IDEAS
  2. 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.
  3. repec:oup:restud:v:80:y:2013:i:3:p:876-891 is not listed on IDEAS
  4. Muriel Niederle & Lise Vesterlund, 2010. "Explaining the Gender Gap in Math Test Scores: The Role of Competition," Journal of Economic Perspectives, American Economic Association, vol. 24(2), pages 129-44, Spring.
  5. 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.
  6. Loukas Balafoutas & Adrian Beck & Rudolf Kerschbamer & Matthias Sutter, 2011. "What Drives Taxi Drivers? A Field Experiment on Fraud in a Market for Credence Goods," CESifo Working Paper Series 3461, CESifo Group Munich.
  7. 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.
  8. Gunderson, Morley, 1989. "Male-Female Wage Differentials and Policy Responses," Journal of Economic Literature, American Economic Association, vol. 27(1), pages 46-72, March.
  9. John A. List, 2004. "The Nature and Extent of Discrimination in the Marketplace: Evidence from the Field," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 49-89.
  10. repec:tpr:qjecon:v:102:y:1987:i:1:p:37-50 is not listed on IDEAS
  11. Matthias Sutter & Ronald Bosman & Martin Kocher & Frans Winden, 2009. "Gender pairing and bargaining—Beware the same sex!," Experimental Economics, Springer, vol. 12(3), pages 318-331, September.
  12. Judith Rich & Peter Riach, 2002. "Field experiments of discrimination in the market place," Natural Field Experiments 00328, The Field Experiments Website.
  13. Tirole, Jean & Levine, David & Fudenberg, Drew, 1987. "Incomplete Information Bargaining with Outside Opportunities," Scholarly Articles 3196301, Harvard University Department of Economics.
  14. 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.
  15. Drew Fudenberg & David K. Levine & Jean Tirole, 1987. "Incomplete Information Bargaining with Outside Opportunities," The Quarterly Journal of Economics, Oxford University Press, vol. 102(1), pages 37-50.
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