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Gender Differences in Bargaining Outcomes: A Field Experiment on Discrimination

  • Lise Vesterlund

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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File URL: http://www.ewi-ssl.pitt.edu/econ/files/faculty/wp/111211_wp_VesterlundLise_genderNeg_12_11.pdf
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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. Loukas Balafoutas & Adrian Beck & Rudolf Kerschbamer & Matthias Sutter, 2011. "What drives taxi drivers? A field experiment on fraud in a market for credence goods," Working Papers 2011-11, Faculty of Economics and Statistics, University of Innsbruck.
  2. 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.
  3. Drew Fudenberg & David K. Levine & Jean Tirole, 1987. "Incomplete Information Bargaining with Outside Opportunities," Levine's Working Paper Archive 229, David K. Levine.
  4. 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.
  5. 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.
  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. Judith Rich & Peter Riach, 2002. "Field experiments of discrimination in the market place," Natural Field Experiments 00328, The Field Experiments Website.
  8. 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.
  9. 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.
  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.
  11. 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.
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