AN EXPERIMENTAL TEST OF THE PERSISTENCE OF GENDER‐BASED STEREOTYPES

I. INTRODUCTION Whether men and women differ in their attitudes toward risk (and more specifically in their willingness to accept risk, ceteris paribus) is a subject of much debate; no clear answer is provided by the existing data. Although most evidence suggests that women perceive risks as greater, engage in less risky behavior, and choose alternatives that involve less risk, not all studies find a stable sex difference (see Eckel and Grossman--EG hereafter--(2008) and Daruvala (2007) for reviews of the literature). Although it is not known whether or not there is a gender difference in risk aversion, some evidence suggests that women are perceived to be more risk averse than men. EG and Daruvala both report evidence suggesting that subjects in their experiments consistently used visual clues (i.e., the sex of the other subjects) in assessing the risk preferences of others and consistently assessed females to be more risk averse than males. The evidence suggests that subjects applied stereotypes in predicting the risk attitudes of others. Stereotyping is the act of assigning to a member of a particular group a characteristic or trait based solely on the individual's membership in that group. Stereotypes may be benign and somewhat accurate, or they may be prejudicial, inaccurate, and used to justify discriminatory behavior. Whether benign or prejudicial, stereotyping results in the individual being seen not as a distinct being with his or her own attributes but solely as a member of a group conforming to some unvarying pattern, lacking any individuality. If forced to predict the characteristics or actions of an individual with limited or no information, one may draw on stereotypes to improve one's forecasting accuracy relative to randomly guessing, assuming the stereotype contains some kernel of truth. When presented with more individuating information relevant to the characteristic or action being predicted, downplaying any stereotype in favor of the individuated information should improve the accuracy of predictions. A failure to incorporate individuating information in place of the stereotype may adversely affect the economic choices of both men and women. Johnson and Powell (1994) argue that women, perceived to be less able to make risky decisions, are less likely to be given corporate promotions. In an attempt to explain the wage gap, Vesterlund (1997) shows that if, in a model with two types of workers with identical productivity, more risk-averse workers can be identified, then that group (women if the stereotype is applied) faces a distribution of wages that is stochastically dominated by the distribution for the less-risk-averse group. Evidence of investment brokers offering women lower-risk/lower-expected-return investments than those offered to men is reported in Wang (1994). Grable and Lytton (1999) note the reliance of financial advisors on demographic characteristics to assess risk attitudes and that "This method assumes strong correlations between demographic and socioeconomic characteristics and financial risk tolerance... In many cases heuristic judgments are little more than commonly accepted myths" (p. 165). Finally, the impact of stereotyping is not limited to financial and employment issues. Evidence suggests that physician's stereotypes drive treatment differences. Schulman et al. (1999), and other studies referenced therein, show that compared with men with the same symptoms, women patients are less likely to be prescribed aggressive treatment. Other research suggests that these differences are not due to the preferences of the patients (Saha, Stettin, and Redberg 1999). The Psychology literature has extensively addressed how and when stereotypes are used when judging others. Dual-process theories argue that there are two different ways of judging a person: either by relying on stereotypes or by assessing the individual's specific attributes or qualities [see Bodenhausen, Macrae, and Sherman (1999) and Kunda and Thagrad (1996) for reviews of the evidence regarding dual-processes in stereotyping]. …