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Eyal Lahav, Arad Nir and Erez Siniver
''Do differing pay schemes help close the gender gap in overconfidence?''
( 2015, Vol. 35 No.1 )
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.
Keywords: Overconfidence, gender, bonuses, performance pay, self evaluation
JEL: J1 - Demographic Economics: General
J3 - Wages, Compensation, and Labor Costs: General
Manuscript Received : Dec 21 2014 Manuscript Accepted : Mar 11 2015

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