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Gender and risk preferences
PS 115D Spring 2016
Week 1 Report
In the first game, 176 students in the class were first given the option between picking a risky or safe
income given that there was a mean variance tradeoff. Given what Crozon and Gneezy said about differences in
willingness to take risks between men and women, we expected to see that men took the risky income more than
women did. In the income game with mean-variance tradeoff, 64 men chose risky, compared to 51 women. Only
17
men chose the safe option, while 41 women chose safe respectively. The resulting mean income for men was
$175,679.01, with a range of $240,000, compared to a mean income of $150,543.48 and a range of $230,000 for
women. The class’s choices did result in a gender pay gap. Interestingly, the experimentally induced pay gap was
higher than the commonly accepted gender pay gap of 77%, the class’s pay gap as actually around 85%. When it
comes to the argument over gender wage gaps, there are generally two main sides of the argument, one placing the
cause of such gaps in the employers gender discrimination, one citing that it’s women’s self selection into lower
paying fields. The income game seems to have illustrated the later perspective, that of the employers. In our game,
women picked the safer option almost two times more than their male counterparts. The observation of the gender
gap in the real world has a few notable societal explanations. On the aggregate, women are generally expected to
carry more responsibility for housework and child rearing than their male counterparts. Because of this unequal
responsibility, women often take jobs that will allow for them to care for their families more, and these jobs
generally come with a lower pay than the higher risk, higher responsibility careers.
In the second game, the mean income remained the same, but the variance changed. In this scenario, a
person is taking on additional risk in their occupation without any prospect for a higher return. In this case, much
more people (both men and women) chose the safe route. 133 on the 173 students chose the safe option that is
nearly
77% of the class. The small minority of those who did take the riskier route in the second game has various
answers
as to why, but they one that stood out the most to me was that they seemed to be excited about the risk.
