Friday, March 27, 2015

When to Compete: Do Women Know Better?

Women are more attuned to competitive environments and change their behavior accordingly, argued Harvard Business School doctoral candidate Pinar Fletcher, at this week’s WAPPP seminar. Titled “Competing at All Costs: Gender and Dysfunctional Competition,” the presentation focused on destructive competitive behavior and how it varies by gender and environment.

Past research featured in a 2013 WAPPP seminar, indicated that there are significant gender differences when it comes to competition. A randomized control trial revealed that 73% of men chose to compete in winner-takes-all competitions for potentially higher pay over working independently for lower pay under piece-rate pay schemes, while just 35% of women chose the winner-takes-all option. Researchers have been trying to explain this gender gap for years now, and Fletcher hopes to use the field of behavioral economics to better explain the issue.

Some arguments frame this gender difference as a problem, arguing that women’s propensity to not compete is a weakness, but Fletcher pointed out that men often lose money by choosing the competitive scheme. Since men are not always benefitting from their higher propensity to compete, it could be useful to examine the competitive context.

Fletcher’s research, which she conducted with coauthor and HBS Professor Kathleen McGinn, looks explicitly at destructive competitive behavior, i.e. competitive behavior that aims to hurt competitor(s) but has the potential to give net losses or net gains to the instigator. In an organizational context, the factors that determine the costs and benefits of destructive competitive behavior are (1) the incentive systems, (2) the performance feedback systems, meaning what your performance is compared to, and (3) behavioral norms of the work environment.

There are two organizational contexts in which this kind of competition can occur: high intensity and low intensity. Low intensity environments are still competitive, but individuals feel that their performance matters regardless of how they compare with others, usually because they receive feedback in relation to how they did over time or based on objective standards. Here, the expected payoff of destructive competitive behavior is uncertain because the costs of competing in that manner outweigh the benefits. High intensity environments are just the opposite, stressing that winning over someone else is key. In these environments, there is more certainty that destructive competition will bring more benefits than costs.

Fletcher’s hypothesis was that the propensity for destructive competitive behavior would be greater in high intensity environments than in low intensity ones but predicted that an interaction between gender and competition intensity would mitigate these differences. The authors predicted that in high intensity situations, the certainty of the expected payoff of competitive behavior would wipe out any gender differences, while in low intensity situations, the ambiguity would allow gender differences to creep back in.

Fletcher and McGinn conducted three randomized control trials involving partnered tasks with varying payment schemes, all of which confirmed these hypotheses. The first and second studies focused on incentive systems and social comparison/performance feedback, while the third study focused on behavioral norms.

The first study, in which everyone was paired with a relatively well-performing competitor, participants were assigned to either a high intensity or low intensity environment and made decisions in “strong” – or certain – contexts as well as “weak” – or ambiguous – contexts. In strong situations with high intensity competitions, men and women competed just as much as men.
In weak situations with low intensity competitions, men performed better than women. However, as Fletcher noted, women’s actual net payoff was greater on average than men’s.

The second study manipulated the incentive scheme and performance feedback type separately to parse apart how men and women reacted differently to incentives. This study replicated the findings of the first study, showing that women change their competitive behavior in response to the environment, while men exhibit the same competitive behavior across conditions. Additionally, men factor in incentive scheme to some extent, but not as well as women do.

The third study revealed that the overwhelming majority (~90%) of destructive competitive behavior was driven by a utilitarian or self-serving justification but that it varied by the competitive behavioral norms of the environment.

In short, men are more likely to engage in reflexive competitive behavior, while women are more context-dependent and attuned to the “rules of the game,” but gender differences in destructive competitive behavior only reveal themselves in low intensity competition settings. In addition, women in high intensity settings perceive their competition to be with female colleagues, while the perception in “low intensity” settings is competition with their male colleagues. Women reap more benefits from destructive competition in high intensity situations, however, so future research looking into women’s advantages in these settings may help organizations perform better. 

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