There's more to life than competition

2005

An illuminating piece by New York Times columnist, John Tierney, in the Houston Chronicle makes the point that woman realise far better than men that there's a lot more at stake in life than just money.

Economists recently tried to find out in an experiment in Pittsburgh by paying men and women to add up five numbers in their heads. At first they worked individually, doing as many sums as they could in five minutes and receiving 50 cents for each correct answer. Then they competed in four-person tournaments, with the winner getting $2 per correct answer and the losers getting nothing.

On average, the women made as much as the men under either system. But when they were offered a choice for the next round — take the piece rate or compete in a tournament — most women declined to compete, even the ones who had done the best in the earlier rounds. Most men chose the tournament, even the ones who had done the worst.

The men's eagerness partly stemmed from overconfidence, because on average men rated their ability more highly than the women rated theirs. But interviews and further experiments convinced the researchers, Muriel Niederle of Stanford and Lise Vesterlund of the University of Pittsburgh, that the gender gap wasn't due mainly to women's insecurities about their abilities. It was due to different appetites for competition.

And as Tierney points out, this helps to explain why the traditional male-dominated corporate ladder no longer makes sense.

Now that so many employees (and more than half of young college graduates) are women, running a business like a tournament alienates some of the most talented workers and potential executives. It also induces competition in situations where cooperation makes more sense.

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