The article entitled “The Difference Between Men and Women, Revisited: It’s About Competition” is a discussion written by Prof. Hal Varian on his views about the difference between men and women with reference to the paper written by two economists, namely Muriel Nierderle (of Stanford University) and Lise Vesterlund (of University of Pittsburgh) entitled “Do Women Shy Away From Competition? Do Men Compete Too Much?.” Prof. Varian recognized the attempt of the two economists to explore, through an experiment, the gender differences of which the findings, according to him, “have certainly raised a host of interesting and important questions.” In the article, Prof. Varian presented facts from the paper and supporting evidence from Terry Odean’s finding in order to persuade readers that the gender differences can be explained by looking at the attitudes of men and women toward competition. This paper will attempt to discuss the main points of the article in relation to the economic concepts (in textbook content).
The hypothesis of the paper as discussed by Prof. Varian is that: “If men prefer more competitive environments than women, then there will be more men represented in areas where competition is intense. Essentially, preference of men and women over competitive environments and competition is given emphasis. Preference refers to ordering of some alternatives, based on the degree of satisfaction, happiness, or utility obtained. It involves a process that results in an optimal choice for the individual decision maker. In relation to the article, it is indicated that most men prefer competitive environments than uncompetitive environments; and women prefer environments where they do not have to compete. That is to say, on the one hand, most men prefer competitive work environment because the costs is perceived to be lower than the expected gain. On the other hand, most women prefers non-competitive work environment because the benefits for them are perceived to be greater than the cost.
These preferences of men and women can be further explained by the concept of risk aversion. According to Varian, risk aversion is a description of certain kinds of choice behavior under uncertainty. An economic agent exhibits risk aversion if he/she chooses to take the expected value of an outcome rather than the outcome itself. This is also the same as an individual who prefers a certain outcome to a risky outcome with the same expected return. As discussed in Intermediate Microeconomics book (Varian 221), the risk averse individual has a concave utility function, that is, the utility function has a slope that gets flatter as wealth is increased. It was noted by Eckel on “Men, Women and Risk Aversion: Experimental Evidence”, that in the field studies conducted, it was revealed that women are more risk averse than men; though the result of the experiment is not that conclusive.
Another point that was emphasized in the article is: “From a payoff-maximizing perspective, high performing women enter the tournament too rarely, and low-performing men enter the tournament too often.” The economic theory tells us that the individuals, as decision makers are assumed to be rational beings. Each individual (either a man or a woman) is assumed to have an ordering of preferences over the outcomes to which her actions lead. The task is to choose the most preferred action among those feasible. An individual’s preference ordering is usually represented by a pay-off function or utility function. The problem faced by the decision maker is to choose a feasible action that maximizes the value of the pay-off (utility) function. In relation to the article, women’s choice of occupation is based on her expected utility. Certainly, their choice would be the one that will optimize/maximize their expected utility; the same is true with men.
In the article entitled “The Difference Between Men and Women, Revisited: It’s About Competition,” the author presented his views about the difference between men and women. He discussed the standard economic explanation of the gender differences like preferences, ability and discrimination. He put emphasis on the paper written by Nierderle and Vesterlund to persuade the reader that the differences between men and women are simply the issue of the choice between competitive and non-competitive work environments. Meanwhile, the discussion highlighted the key points of the article and the writer discussed the key points in relation to the economic concepts in textbook content. Key concepts are preferences, risk aversion, and pay off optimization.
Eckel, Catherine C. (2008). “Men, Women and Risk Aversion: Experimental Evidence” Handbook of Experimental Economics Results, Volume 1. Elsevier B.V. Accessed from http://aysps.gsu.edu/isp/files/ISP_Ind_3.pdf.
Nierderle, Muriel and L. Vesterlund (2005). “Do Women Shy Away from Competition? Do Men Compete Too Much? National Bureau of Economic Research Working Paper 11474. Accessed from http://www.nber.org/papers/w11474.
Varian, Hal R. (1993) Intermediate Microeconomics: A Modern Approach 3rd Edition. New York. W.W. Norton & Company