Why Can’t a Woman Bid More Like a Man? Yan Chen Peter Katuščák Emre Ozdenoren U of Michigan CERGE-EI U of Michigan ESA World Congress, Rome July 1, 2007

Questions Are there gender differences in competitive bidding? –First-price sealed bid auctions: BNE, risk, ambiguity –Second-price sealed bid auctions: DSE Biological causes: sex hormones? –Menstrual cycle: natural hormone variation –Affect most women between 15 and 50

Background Hampson and Kimura Hypothesis (1992) –Women’s performance in certain “male-oriented” tasks (spatial ability) is significantly better during menstruation –Women’s performance on certain “female-oriented” tasks (articulatory speech and accuracy) are better during periods of high estrogen levels

Menstrual Phases Menstrual phase (days 1-5) –Secretion of estrogen and progesterone ceases –Degeneration and expulsion of uterine lining –Lowest levels of estrogen and progesterone Follicular phase (days 6-12) –Ovarian follicle develops and secretes estrogen –Reconstruction and proliferation of uterine lining –Increased level of estrogen; luteinizing hormone

Menstrual Phases Peri-ovulatory phase (days 13-15) –Mature follicle release ovum –Luteinizing hormone reaches peak; estrogen slightly decreases Luteal phase (days 16-23) –Corpus luteum releases estrogen and progesterone –Prepare uterine lining for implantation; estrogen 2 nd peak Premenstrual phase (days 24-28) –Estrogen and progesterone decline drastically

Hormone Variations during a Cycle

Experimental Design Sessions: 8 bidders (plus 4 auctioneers) –20 sessions of FPA (10 with auctioneers) –20 sessions of SPA (10 with auctioneers) Two bidders (plus one auctioneer) in each auction 30 rounds, random re-matching each round Valuations randomly generated from a distribution with

Post-Experiment Survey Demographics: gender, race, age, number of siblings Course Information (from Registrar’s Office) Menstrual Cycle –number of days from the next menstrual cycle –PMS Self-described personality and emotions

Hormone Variations during a Cycle

Conclusions Gender –Women bid significantly higher than men in FPA –No gender difference in likelihood of dominant strategy play in SPA Biological level: menstrual cycle –During menstruation: no gender difference in FPA –Women during follicular, peri-ovulatory, luteal, and premenstrual phases bid significantly higher than men Results are not driven by variation of risk aversion across genders or menstrual cycle Usage of pill appears to make a difference