Working Paper: NBER ID: w29382
Authors: Katherine B. Coffman; Paola Ugalde Araya; Basit Zafar
Abstract: Many decisions – such as what educational or career path to pursue – are dynamic in nature, with individuals receiving feedback at one point in time and making decisions later. Using a controlled experiment, with two sessions one week apart, we analyze the dynamic effects of feedback on beliefs about own performance and decision-making across two different domains (verbal skills and math). We find significant gender gaps in beliefs and choices before feedback: men are more optimistic about their performance and more willing to compete than women in both domains, but the gaps are significantly larger in math. Feedback significantly shifts individuals' beliefs and choices. Despite this, we see substantial persistence of gender gaps over time. This is particularly true among the set of individuals who receive negative feedback. We find that, holding fixed performance and decisions before feedback, women update their beliefs and choices more negatively than men do after bad news. Our results highlight the challenges involved in overcoming gender gaps in dynamic settings.
Keywords: belief updating; gender gaps; feedback; decision making; competition
JEL Codes: C91; D80; J16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Type of feedback (good or bad) (Y30) | Updates in beliefs about performance (D83) |
| Updates in beliefs about performance (D83) | Subsequent choices regarding competition (L13) |
| Feedback (C99) | Changes in beliefs and choices (D91) |
| Gender differences in responses to feedback (J16) | Male-female gap in willingness to compete (J79) |
| Negative feedback (D80) | Pessimistic beliefs in women (J16) |
| Initial beliefs (D83) | Resistance to change (O39) |