The glass ceiling in experimental markets

Abstract

In this paper we study whether expectation biases can be responsible for discrimination against women in hiring decisions and what mechanisms exacerbate or mitigate this phenomenon. We study an experimental market in which, in spite of equal performance across genders, individuals discriminate against women. We show that discrimination is neither taste based, nor statistical in nature, but is rooted in biased beliefs about women’s abilities. Furthermore, we show, by using the Implicit Association Test, that biased beliefs are in part the result of an unconscious stereotype. The gender gap increases when candidates are allowed to influence expectations by declaring their expected performance and it narrows if individuals receive accurate information of the performance of the applicants. However, even when accurate information is transmitted the gender gap is not eliminated because individuals do not completely update their initially biased belief.