Wednesday, October 14, 2009

From the archive: Women and negotiation

I also neglected to pull this out of the archive:

I attended a conference yesterday on women professionals. Some interesting stuff was presented. I particularly enjoyed Linda Babcock's talk on women and negotiation. Babcock has written extensively on this topic. The results she presented yesterday were from this paper:

Two experiments show that sex differences in the propensity to initiate negotiations may be explained by differential treatment of men and women when they attempt to negotiate. In Experiment 1, participants evaluated candidates who either accepted compensation offers without comment or attempted to negotiate higher compensation. Men only penalized female candidates for attempting to negotiate whereas women penalized both male and female candidates. Perceptions of niceness and demandingness mediated these effects. In Experiment 2, participants adopted candidates’ role in same scenario and assessed whether to accept the compensation offer or attempt to negotiate for more. Women were less likely than men to choose to negotiate when the evaluator was male, but not when the evaluator was female. This effect was mediated by women’s nervousness about negotiating with male evaluators. This work illuminates how differential treatment may influence the distribution of organizational resources through sex differences in the propensity to negotiate.

For more on this topic, you can see facts and discussion of her book "Women Don't Ask" (with Sara Laschever) at this website. A taste:

Women Don't Like to Negotiate

In surveys, 2.5 times more women than men said they feel "a great deal of apprehension" about negotiating.

Men initiate negotiations about four times as often as women.

When asked to pick metaphors for the process of negotiating, men picked "winning a ballgame" and a "wrestling match," while women picked "going to the dentist."

Women will pay as much as $1,353 to avoid negotiating the price of a car, which may help explain why 63 percent of Saturn car buyers are women.

Women are more pessimistic about the how much is available when they do negotiate and so they typically ask for and get less when they do negotiate—on average, 30 percent less than men.

20 percent of adult women (22 million people) say they never negotiate at all, even though they often recognize negotiation as
appropriate and even necessary.

Again, this is all interesting and everything, but like we discussed in class, I don't know how relevant I actually find it. What I mean by that is this is all correlative, all of the stats you can find that say "more bald men drive fast cars" or "midwesteners watch more football" or whatever are just so descriptive they never seem to answer any sort of "so what" question. So while I think it's interesting that women negotiate less than men on average, I can't help but ask, so what? This seems to be a description of an effect, or result, but with a too vague cause. Even if you were to accept that this relationship between gender and negotiations is causal, it doesn't seem like anything in this tells you the ultimate cause -- why gender is correlative with negotiation strategy. Is it social? Genetic? Legal? Historical? I don't know if you could prove any of that, but until you do, this seems to be an interesting description, but nothing more.
I think the interesting facet of the correlation is that in general I think at least this culture assumes that women are more likely to negotiate, not less, than men. There is the general feeling that women are nicer than men, which leads to the assumption that they ought to be more willing to accept that, at times, negotiation is necessary to provide everyone with somewhat of what they want. I.e., information is shared to encourage perfect competition of interests. But this finding says that they do not.
We can guess as to why, but as you say Ben, it'd be almost purely speculative and probably not capture the whole truth.
My curiosity is about correlations dealing with women who are exceptions to this supposed rule.
The post mentions women will pay more for a car, in order to avoid negotiating. Perhaps this is not a function of failing to negotiate, but of being offered a higher starting price. Salespeople, expecting women to be less prone to negotiation, may expect them to have a higher willingness to pay. Therefore, the salespeople would be practicing price discrimination by offering women a higher price, based on their assumptions that women are less likely to negotiate (which I think is an idea familiar to most people, at least subconsciously). In this case, we are not measuring that women are less likely to negotiate, but rather that their reputations as frightened negotiators translates into a higher indicated willingness-to-pay and subsequent price discrimination by car dealers.
I'm curious about how these numbers have changed over time. The post says that "men initiate negotiations about four times as often as women" and I'm wondering how much that number has decreased over time. Even though women are less likely than men to initiate negotiations, are they more likely to initiate negotiations today than say 50 years ago? Are women becoming more comfortable negotiating over the years as they are moving higher up in corporations or have these number stayed fairly consistent over time?
I am wondering if the study has been reviewed? I think men make more than women based on higher production. Men achieve more aggressively and persistently by personality, and that is what is needed to succeed. Even the better female sales reps (not always) lack some of that and their earnings - based on a straight commission scale that everyone participates in - reflect it. I'm curious if the study breaks down industries and job types where the gaps are most prevalent. Does anyone know?
Interesting how women can choose not to negotiate with men. It would be even more interesting to see if this is changes based on social structures and cultural roots.
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