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Do differing pay schemes help close the gender gap in overconfidence

Author

Listed:
  • Eyal Lahav

    (The College of Management)

  • Arad Nir

    (The College of Management)

  • Erez Siniver

    (The College of Management)

Abstract

We conducted an experiment to compare how overconfidence is influenced by performance-based and fixed payment schemes. Participants in the experiment were students prior to taking a final exam in Introduction to Microeconomics. We find that most participants were overconfident regarding their success on the exam, overestimating the number of questions they would answer correctly. When a fixed pay scheme was used, men were more overconfident than women. Performance-based pay increased the overconfidence of women, and decreased the overconfidence of men. As a result, no gender difference in overconfidence was found when pay is based on performance.

Suggested Citation

  • Eyal Lahav & Arad Nir & Erez Siniver, 2015. "Do differing pay schemes help close the gender gap in overconfidence," Economics Bulletin, AccessEcon, vol. 35(1), pages 30-36.
    • Handle: RePEc:ebl:ecbull:eb-14-01045
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    References listed on IDEAS

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    Cited by:

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    2. Grosch, Kerstin & Fischer, Sabine, 2024. "Gender equivalence in overconfidence A large-scale experimental study in a non-WEIRD country," Department for Strategy and Innovation Working Paper Series 02/2024, WU Vienna University of Economics and Business.

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    More about this item

    Keywords

    Overconfidence; gender; bonuses; performance pay; self evaluation;
    All these keywords.

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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