Where did you get that from? Gender differences in bargaining for gifts and bought goods

ABSTRACT

Do men or women bargain more successfully? Existing evidence suggests that men achieve higher economic outcomes from bargaining than women – but the gap is context-specific. The literature predominantly studies one-shot bargaining games in the laboratory, situations in which communication is impossible, or situations in which persons follow a bargaining protocol. In this study, we use data from a TV show to study whether men or women bargain more successfully for trade deals in the field, without a strict protocol, and with free communication. We find that men and women bargain, on average, equally successfully. However, we find that the bargaining outcomes achieved by female sellers depend on the origin of an object. Specifically, women realize higher outcomes for bought objects than for objects they obtained for free, whereas men realize similar outcomes for bought and free objects. In sum, we find evidence that gender differences observed in the laboratory do not necessarily persist in bargaining situations in other settings and can even be inverted, dependent on the framing of the bargaining situation.

KEYWORDS:

• Bargaining
• gender differences
• gender gap
• field data

JEL CLASSIFICATION:

• C72
• C79
• J16

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability

Data for this study are stored in a repository at Mendeley and can be accessed through http://dx.doi.org/10.17632/n67wf4hxzy.1.

Notes

¹ Field studies of bargains over taxi rides (Castillo et al. 2013) and car sales (Ayres and Siegelman 1995) found a gender gap, but in these studies, buying parties followed a bargaining protocol. Hence, the authors can exclude that assertive or cooperative bargaining explains the difference and trace the effect to statistical discrimination by buyers.

² Andersen et al. (2021), Exley, Niederle, and Vesterlund (2020), and Mazei et al. (2015) summarize the evidence on gender differences in bargaining depending on circumstances and contextual factors.

³ The show ‘Cash for Curiosities’ (German, ‘Bares für Rares’) is aired on ‘ZDF’ since August 2013.

⁴ Our description of the show is based on interviews we conducted with participants and on official information from the website of ZDF. Interviews with participants match the official description of the show’s process. TV shows provide a clean environment, where processes are better observable than in daily life. Researchers have used TV show data to circumvent several empirical problems of non-experimental research. Prior research exploits data from shows like ‘Jeopardy!’ (Metrick 1995), ‘The price is right’ (Berk, Hughson, and Vandezande 1996), ‘Deal or no Deal’ (Post et al. 2008), ‘Will (s)he share or not’ (Belot, Bhaskar, and van de Ven 2010), and ‘Divided’ (van Dolder et al. 2015) to study risk preferences, cooperation, communication, and bargaining strategies. Hernandez-Arenaz and Iriberri (2018) use the Spanish TV show ‘Bargain as you can’ to study gender differences in bargaining over a fixed pie.

⁵ Six different experts and 13 different traders (four of them are females) appear in the episodes we analyse. The experts know the object before and a team of art experts collects information on the objects. Frequently, the expert does not provide a single value for the estimated market value but suggests a range of values. The traders are art dealers who typically intend to resell the objects in their stores. In each bargain, there are five potential buyers, but sometimes two there are two sellers who try to sell the object jointly.

⁶ Very few participants have to leave the show before they enter the trading room because their expected price strongly deviates from the expert estimate. Nevertheless, candidates who proceed to the trading room can freely decide whether to sell the object or not even if offers are above expert estimates.

⁷ In the episodes, 405 candidates appeared. Eleven candidates did not enter the trading room (see Footnote 6). 40 candidates did not share how they received the object.

⁸ If the expert provides a range of values for the estimated market value, we define the expert estimate as the average of the lowest and the highest suggested value.

⁹ We distinguish art objects, collector’s items, furniture, other furnishing items, hobby-related products, jewellery, and other products. Two researchers have independently classified each product into one of these categories. 23 inconsistent classifications were resolved together afterwards.

¹⁰ Our results are robust to using the logarithmic price as the dependent variable and including the logarithmic expert estimate as a control variable.

¹¹ The economic outcome for free objects is lower for female than male candidates (–0.012 vs. 0.056), but the difference is not statistically significant (t = 1.31). In a related paper, Andersen et al. (2021) observe no significant differences between bargaining outcomes over inherited property between female and male sellers (Table 8 in Andersen et al. 2021).

¹² Specifically, bargaining in developing economies might differ from bargaining in other countries. For instance, women’s bargaining power might depend on how financially included they are. See, for example, Sedai, Vasudevan, and Pena (2021) for a discussion.