Economic Opportunity

Ricardo Hausmann

Ricardo Hausmann

Rafik Hariri Professor of Practice of International Political Economy, Harvard Kennedy School
Martha Chen

Martha Chen

Adjunct Lecturer in Public Policy, Harvard Kennedy School
Bowles, Hannah Riley, Linda Babcock, and Lei Lai. “Social incentives for gender differences in the propensity to initiate negotiations: Sometimes it does hurt to ask”. Organizational Behavior and Human Decision Processes 103.1 (2007): , 103, 1, 84–103. Web. Publisher's VersionAbstract

Four experiments show that gender differences in the propensity to initiate negotiations may be explained by differential treatment of men and women when they attempt to negotiate. In Experiments 1 and 2, participants evaluated written accounts of candidates who did or did not initiate negotiations for higher compensation. Evaluators penalized female candidates more than male candidates for initiating negotiations. In Experiment 3, participants evaluated videotapes of candidates who accepted compensation offers or initiated negotiations. Male evaluators penalized female candidates more than male candidates for initiating negotiations; female evaluators penalized all candidates for initiating negotiations. Perceptions of niceness and demandingness explained resistance to female negotiators. In Experiment 4, participants adopted the candidate’s perspective and assessed whether to initiate negotiations in same scenario used in Experiment 3. With male evaluators, women were less inclined than men to negotiate, and nervousness explained this effect. There was no gender difference when evaluator was female.

Bohnet, Iris, Benedikt Herrmann, and Richard Zeckhauser. “Trust and the Reference Points for Trustworthiness in Gulf and Western Countries”. Quarterly Journal of Economics 125.2 (2010): , 125, 2, 811-828. Web. Publisher's VersionAbstract

Why is private investment so low in Gulf compared to Western countries? We investigate cross-regional differences in trust and reference points for trustworthiness as possible factors. Experiments controlling for cross-regional differences in institutions and beliefs about trustworthiness reveal that Gulf citizens pay much more than Westerners to avoid trusting, and hardly respond when returns to trusting change. These differences can be explained by subjects' gain/loss utility relative to their region's reference point for trustworthiness. The relation-based production of trust in the Gulf induces higher levels of trustworthiness, albeit within groups, than the rule-based interactions prevalent in the West.

Bowles, Hannah Riley. “Claiming Authority: How Women Explain their Ascent to Top Business Leadership Positions”. (2012). Web. Publisher's VersionAbstract

Career stories of 50 female executives from major corporations and high-growth entrepreneurial ventures suggest two alternative accounts of how women legitimize their claims to top leadership positions: navigating and pioneering. In navigating accounts, the women legitimized their claims to top authority positions by following well institutionalized paths of career advancement (e.g., high performance in line jobs) and self-advocating with the gatekeepers of the social hierarchy (e.g., bosses, investors). In pioneering accounts, the women articulated a strategic vision and cultivated a community of support and followership around their strategic ideas and leadership. The career stories suggested that, when the women’s authority claims were not validated, they engaged in narrative identity work to revise their aspirations and legitimization strategies. Sometimes narrative identity work motivated women to shift from one type of account to another, particularly from navigating to pioneering. Based on inductive analyses of these 50 career stories, I propose a process model of how women legitimize their claims to top leadership positions by recursively resetting career accounts as authority claims succeed or fail.

Bohnet, Iris, Max H Bazerman, and Alexandra van Geen. “When Performance Trumps Gender Bias: Joint Versus Separate Evaluation”. (2015). Web. Publisher's VersionAbstract

 We examine a new intervention to overcome gender biases in hiring, promotion, and job assignments: an “evaluation nudge,” in which people are evaluated jointly rather than separately regarding their future performance. Evaluators are more likely to focus on individual performance in joint than in separate evaluation and on group stereotypes in separate than in joint evaluation, making joint evaluation the money-maximizing evaluation procedure. Our findings are compatible with a behavioral model of information processing and with the System 1/System 2 distinction in behavioral decision research where people have two distinct modes of thinking that are activated under certain conditions.

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Field, Erica, et al.Does the Classic Microfinance Model Discourage Entrepreneurship among the Poor? Experimental Evidence from India”. American Economic review 103.6 (2013): , 103, 6, 2196-2226. Web. Publisher's VersionAbstract
Do the repayment requirements of the classic microfinance contract inhibit investment in high-return but illiquid business opportunities among the poor? Using a field experiment, we compare the classic contract which requires that repayment begin immediately after loan disbursement to a contract that includes a two-month grace period. The provision of a grace period increased short-run business investment and long-run profits but also default rates. The results, thus, indicate that debt contracts that require early repayment discourage illiquid risky investment and thereby limit the potential impact of microfinance on microenterprise growth and household poverty.

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