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| Eyal Lahav, Arad Nir and Erez Siniver |
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| ''Do differing pay schemes help close the gender gap in overconfidence?'' |
| ( 2015, Vol. 35 No.1 ) |
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| We conducted an experiment to compare how overconfidence is influenced by performance-based and fixed payment schemes. Participants in the experiment were students prior to taking a final exam in Introduction to Microeconomics. We find that most participants were overconfident regarding their success on the exam, overestimating the number of questions they would answer correctly. When a fixed pay scheme was used, men were more overconfident than women. Performance-based pay increased the overconfidence of women, and decreased the overconfidence of men. As a result, no gender difference in overconfidence was found when pay is based on performance. |
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| Keywords: Overconfidence, gender, bonuses, performance pay, self evaluation |
JEL: J1 - Demographic Economics: General
J3 - Wages, Compensation, and Labor Costs: General |
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| Manuscript Received : Dec 21 2014 | | Manuscript Accepted : Mar 11 2015 |
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