Do differing pay schemes help close the gender gap in overconfidence?

Eyal Lahav, Arad Nir, Erez Siniver

Research output: Contribution to journalArticlepeer-review

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.

Original languageEnglish
Pages (from-to)30-36
Number of pages7
JournalEconomics Bulletin
Volume35
Issue number1
StatePublished - 2015
Externally publishedYes

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