Women act more like men when they have to ask women for money

Can we talk?
Can we talk?
Image: Reuters/Sergei Karpukhin
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A recent, admittedly quirky study from Spain proposes an intriguing theory: In a financial negotiation, women are more likely to ask other women in power for more money than they will a man.

This behavior may contribute to the persistent gender pay gap, in the US, and elsewhere, the authors argue, because men are already in more management and leadership positions, increasing the likelihood that a woman will self-discriminate during a salary discussion, knowingly or not. Salary negotiations have been found to be a key determinant of earnings later in one’s career.

But what’s unusual about this study, which was published in the Journal of Economic Behavior and Organization, is that rather than examine actual salary or negotiation data, or lab experiments, the authors analyzed the behavior of contestants on a 2013 Spanish game show called Negocia como puedas, or “Bargain as you can.”

The authors, Iñigo Hernandez-Arenaz, business professor and director of the Decision Science Laboratory at the University of the Balearic Islands, and Nagore Iriberri, a professor and scholar of game theory and gender economics at the University of the Basque Country, described the show in a recent essay for Aeon, explaining why they saw it as a good proxy for salary negotiations.

In Negocia como pueda, male and female contestants were given a cash sum and asked a basic trivia question. They then had to find a stranger who could supply an answer. “This is where the negotiation took place: the contestant had to buy the answer from a responder on the street, negotiating the price by a process of bargaining, in which the contestants made offers and the responders made demands,” the professors write. When the answers were correct, the contestant and stranger would split the prize money according to the deal they had struck. Neither player kept any cash when the answers were wrong.

The show aired for only one summer, but it gave the researchers more than 400 matchings to analyze. Here’s a clip from the show (in Spanish):

So how is this scenario like a pay raise negotiation, which does not happen in front of a camera and between strangers?

The study authors acknowledge the research’s weaknesses—particularly that people act differently when they’re being filmed for TV. However, they also point out that the show’s negotiations weren’t structured, much like most salary discussions. What’s more, in Negocia como puedas, one person had more knowledge and power than the other: The proposer could walk away to find a new responder at any time within a three-minute window, and only the proposer knew how large the pie was. Therefore, like a replaceable employee before a manager, the responder wasn’t sure at what point a request might be considered too greedy or unfeasible, potentially shutting down the conversation entirely.

Finally, since the average pot of money was €400 (approximately $520 at that time, and $455 today), though it could increase to as much as €1,600 as the game progressed, the incentive was large enough to legitimately motivate players, which is not the case in lab decision games, the professors assert. The game also helped to avoid the pitfall of field studies, they argue, where the interaction effect is not visible.

Women seem to adjust their ask when they’re facing a man with power

Researchers in past lab studies have reached conflicting results about how men and women treat each other in ultimatum games. In one experiment cited in this paper, economists found that both men and women are more likely to accept offers from women, and another suggested that women, but not men, are more accepting of overtures from male proposers. A 2014 study that relied on an in-person wage-bargaining game concluded that men open with lower starting salaries when they’re paired with a woman.

Hernandez-Arenaz and Iriberri didn’t find such differences. But they did discover that “male responders negotiating against female contestants captured more of the pie than any others, getting around 2% more than responders in any other matching,” they write in Aeon.

However, the far more significant difference was seen when women answered the trivia question for male contestants. These women took home 16% less than responders in any other pairing. Importantly, their analysis found “clear evidence” that male proposers (i.e. those in the power position) were not making lower offers to women, nor were female proposers favoring their own gender. The gap was explained by female responders asking for less money when facing a male proposer. When women negotiated with other women in the power position, the authors explain, they “behaved in exactly the same way as men did.”

In their analysis, the authors controlled for other factors and observable traits that may have influenced the contestants’ negotiations, including socio-economic status, age, and attractiveness. They tossed out interactions that were tainted by the host’s banter, such as when he chimed in to joke that someone was being stingy.

A gap in the research

Because this is just one study, it remains an intriguing talking point and plausible theory, not yet proof of a pattern. Further research is needed, the authors suggest, to investigate the dynamics at play that may connect their observations to the pay gap. “There is no doubt that discrimination plays a role [in pay inequity]” they write in Aeon, “but there are other factors that deserve attention.”

Scholars have pointed to myriad reasons—including what’s known as the “motherhood penalty”— to explain the pay gap’s incredible longevity. However there’s no real consensus on exactly how or why women don’t receive the same increases as men.

The common wisdom is that women are particularly challenged by conversations about money because of gendered ideas about the way women ought to behave, and the fear of looking aggressive or self-interested. While there’s data to support the claim that women simply don’t seek raises as often as men do, research also suggests that women do ask for raises (paywall) at the same rate as their male counterparts, but simply aren’t as successful in their bidding.

Either way, promoting more women into leadership positions—as women have long called upon companies to do—would help. If the Spanish study reflects accurately on women’s behavior or psychology in real life negotiations, placing more women in charge at within an organization could make it easier for other women to ask for the salary they deserve. And even if the show has no resemblance to the real world, we know that placing women in management positions leads to more women mentoring and advocating for other women, better pay equity, and a spillover effect that improves conditions for employees of every rank.