When Under Pressure, "Play Like a Girl"

Every eighth of March, on International Women's Day, we are reminded of the disproportionately low numbers of women in positions where there is money or power in society. For example, there are only 41 women CEOs in the Fortune 500 companies (8.1 percent). The academic literature provides several possible explanations for this. One is that women self-select themselves into jobs that will not necessarily lead to high-profile positions. Another is that there is discrimination against women. A third is that women may perform worse in competitive settings.

In this post, I will challenge the third explanation by arguing that it might not be the case that the most talented females underperform compared to the most talented men in real competitive settings. I base this on the findings from several sports-related studies that I have conducted.

Sports Data in Gender-Related Research

One may argue that using sports data for gender-related questions may have some drawbacks, which can be true, but sports data also have many advantages. First, in professional sports, the contestants have very strong incentives to win. Second, using data from real sports competitions eliminates any possible skepticism about applying behavioral insights obtained in a laboratory to real-life situations. Third, sports contests involve high-stake decisions that are familiar to the participants, which is not always the case in laboratory experiments. Fourth, observing athletes doing sport provides a unique opportunity to measure performance as a function of abilities and stakes, which are very difficult to observe in a “non-sports” workplace. To sum up, sports data are unique in that they embody a large amount of detailed information that can be used for research purposes.

From Judo to Financial Markets, and Role of Testosterone

The first study, titled “Psychological momentum and gender,” was published in the Journal of Economic Behavior and Organization. It investigates the effect of psychological momentum on the probability of winning a bronze-medal fight in professional judo. What is interesting in these fights is that one judo fighter competes after winning his/her previous fight against another judo fighter who has just lost his/her previous fight. We found that competing after a recent victory increases the chances of winning again, but only among men. It has no effect among women. Interestingly, this result is in line with evidence about testosterone. Testosterone is known to enhance the performance of both men and women, but they react differently to victories and losses. While it is stable among females, among men it increases following victory and decreases following loss.

Moreover, several studies have shown a positive association among male traders between testosterone levels and higher profits in financial markets. There are also grounds to assume that women are less influenced by the effect of testosterone when it comes to financial risk-taking. Therefore, it is possible that, similarly to judo, male traders in financial markets are more affected by psychological momentum, which may create price bubbles, because success in a first investment leads to an increased willingness among men to take additional risks and reinvest. By the way, during the collapse of the housing bubble in 2008, the female traders' representation in Wall Street was only 10 percent. Thus, an increased share of women traders in the market might reduce the creation of such bubbles.

Choking Under Pressure in Tennis

In my other co-authored study, “Choking under pressure and gender: Evidence from professional tennis,” which was published in the Journal of Economic Psychology, we investigated the probability to win a game on serve at different junctures of a tennis match in the most prestigious tennis tournaments. For those who are not familiar enough with the rules of tennis, a player who serves has an advantage to win the game. Comparing the performance of men versus women in low-stakes versus high-stakes situations, we found that men lose significantly more games on serve in high-stakes situations compared to low-stakes situations. Our results showed that even if women show a drop in performance in the more crucial stages of the match, the drop is still about 50 percent smaller than that of men.

Some Concluding Remarks

The results of these two studies question the assumption that the performance of high-profile women in real competitive situations with high pressure is worse than that of men. What we have found is that men are more exposed to different psychological effects and that women’s performance is more stable. Isn’t that what we are looking for in leadership: coping with pressure and stability? If so, then, play like a girl, and you will find those qualities.