During financial negotiations, women are less likely to ask a man for more money than from a woman, found a recent study. And since most management and leadership positions are occupied by men, this disadvantage may negatively affect a lot of women, as salary negotiations can determine one’s earning potential throughout their career. Researchers culled and analyzed data from a Spanish game show — their methods may be quirky but the results are intriguing.
The key finding from the study, published in the Journal of Economic Behaviour and Organization, was not that men in power weren’t giving women the amount of money they asked for, but rather that the women were self-discriminating, asking for lower compensation when in front of men. When women were the ones in power, both men and women negotiated in similar ways. So, the gender composition of the bargaining table really made a difference in how and how much money women thought they deserved.
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Negocia Como Puedas or ‘Bargain As You Can’ was a Spanish game show that aired in 2013, challenging contestants to master the art of negotiating and bargaining. Contestants were told the total sum of the cash prize and asked a basic trivia question. They would then have to find a responder, someone on the street, whom they would solicit for the answer. After negotiating the cost, if the respondent’s answer was right, they would get what they negotiated for, and the contestant would keep the rest of the money; if they were wrong, no one would get the cash prize.
While the show only aired for a few months, the 400 negotiations gave study authors Iñigo Hernandez-Arenaz, director of the Decision Science Laboratory at the University of the Balearic Islands, and Nagore Iriberri, a professor of game theory and gender economics at the University of the Basque Country, enough data to analyze.
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While basing research findings off a game show seems unconventional, the authors point out that the negotiations on the show were closer to real salary negotiations than what could be created in lab conditions. In Negocia Como Puedas, the contestant was the only one who knew how much the actual cash amount was, and had the power of simply walking away and finding another person if the responder quoted too high an amount. And like an employee, the responder had to toe the line between guessing what they thought was a legitimate value for their answer, and not seeming too greedy to be replaced. The prize money, averaging at $520, was a real enough incentive for players and the ‘interaction effect,’ where different variables change the outcome of the results (in this case, things like age, attractiveness, socio-economic status) was easily visible through the show.
Hernandez-Arenaz and Iriberri controlled for factors like observable traits and interactions that were tainted by the host’s comments. They found “clear evidence that there wasn’t discrimination from men towards women through lower offers, but rather women who self-discriminated by asking for less.” While male responders against female contestants captured more of the cash prize (by about 2%) than any other combinations, the combination of female responders against male contestants showed a drop in negotiation amounts by 16%.
While the authors agree that this is just one study and further research is needed, the dynamics at play during salary negotiations are clearly swayed by gender. Specifically, they write, “gender differences arise only in negotiations between a man and a woman where the woman is in the weak position, but not when the woman is the empowered party. This highlights the importance not only of gender and gender pairings, but also the relative strength held in the bargaining table.”
