Literature Review by Rekha Reddy: "Do Men and Women Negotiate Differently--and Why Does it Matter?" I.

Introduction American MBA students were asked to write essays discussing who has the advantage in negotiations, men or women. By a large majority, the students described men and women using stereotypes: men were portrayed as self-assured, assertive and able to stand firm against compromise, and women as emotional, relationship-oriented and cooperative (Kray, Thompson and Galinsky 2001). Whether women and men in fact view negotiation differently or behave differently in negotiation, there clearly is a perception that they might. It is critical to address these perceptions, because they contribute to expectations and behaviors that flow from these assumptions. This paper aims to explore the effect of our preconceived or learned assumptions on gender and negotiating behavior by looking at the supporting evidence, and the consequences of that behavior. Section II examines empirical studies to see whether there are measurable differences in the negotiating style of men and women. Section III investigates possible consequences of the identified differences. Section IV explores possible reasons for gender-related differences in negotiating style. Section V suggests prescriptive measures for both men and women to improve negotiating performance. Section VI summarizes and concludes. An appendix presents my superficial examination of data on outcomes with respect to gender in the Sally Swansong negotiation from the WWS 596 2003 class. II. Are there measurable differences in the negotiating styles of men and women? Women are stereotypically more cooperative and relationally oriented than men, which is supposed to translate into disadvantageous outcomes in negotiating. The popular press is full of anecdotes about women being at a disadvantage in purchasing cars and in negotiating salaries relative to males in similar situations. However, many academic studies have yielded little or no evidence of statistically significant differences between the negotiating style of males and females. Other studies that have found gender-related differences have been countered by other studies with opposing results. Some of the evidence addressing gender differences in cooperativeness, aspirations, frequency of negotiations, and biases involved in negotiating with women is addressed below. True or False: Women Cooperate More Some studies have found small differences between the behavior of men and women related to cooperativeness. Many early experiments on the effect of gender used a variation of the Prisoner's Dilemma Game in which negotiators can choose to cooperate or defect for various payoffs (Raiffa 1982). Walters et al. (1998) found that individual pieces of research produce contradictory findings, but larger reviews have shown small, but statistically significant differences that indicate that women tend to behave more cooperatively than men in negotiations. Bixenstine, Chambers and Wilson (1964) "found that females were initially more trusting and more trustworthy than men but were less willing to forgive violations of trust." In two studies that compared the characteristics of male and female managers, men were much less likely than women to share information (Babcock and Laschever 2003).

However, these differences in outcomes disappeared in many cases when the studies controlled for variables other than gender. Rubin and Brown noted conflicting empirical findings in many studies in their literature review of 100 studies, each of which had focused at least in part on the relationship between sex and various aspects of bargaining behavior. They conclude: "the considerable variation within each sexual role masks the differences to be gleaned between the sexes." (Raiffa 1982). Watson (1994) also downplayed the role of gender differences. The study found that the chances that a negotiator would be cooperative or competitive in any given situation is less likely to have to do with gender than other factors, such as position in the organization. True or False: Women Set Lower Aspirations Considerable evidence supports the hypothesis that women set their goals lower than men in the area of compensation, leading to less favorable outcomes in salary negotiations. This difference is important because negotiators with high outcome goals are generally more persistent than negotiators with low outcome goals. In 1978, Sauser and York found that women's pay satisfaction tends to be equal or higher than that of men in similar positions, even though women typically earn less than men doing the same work. A study by Major and Konar (1984) of students in management programs at the State University of New York in Buffalo found that men expected to earn 13 percent more than women in their first year of working and 32 percent more at their career peeks, controlling for supervisors' assessments of the students' skills or qualifications. A study of college seniors at Michigan State University, women's estimates of "fair pay" averaged 4 percent less than men's estimates for their first jobs and 23 percent less than men's for fair career peak pay. Finally, a survey of undergraduate business students (Martin 1989) yielded the result that women's salary expectations were between 3 and 32 percent lower than those reported by men for the same jobs. These lower aspirations by females were recorded before either sex had even entered the labor market. A study which instructed college students to decide how much money to pay themselves and how much money to pay others (Callahan-Levy Messe, 1979) found that women paid others, including other women, more than they paid themselves. The researchers found no gender differences in the student's evaluation of how well the work had been performed, but only evaluated the compensation of the work as lower. Even using first, fourth, seventh and tenth graders, the researchers found that in every grade, girls paid themselves between 30 and 78 percent less than boys paid themselves. While it has been shown that women generally set lower goals for themselves in negotiations than men in negotiations, controlling for differences in goals and/or status has been shown to eliminate performance differences between men and women (Stevens, Bavetta and Gist 1993). For example, findings from law school negotiations almost uniformly find no gender differences in outcomes, though a study by Farber and Rickenberg (1999) documents lower levels of confidence in women negotiators, even when their outcomes were the same as male students. True or False: Women Don't Ask A recent book by Babcock and Laschever suggests that the problem is not that women achieve lower outcomes when they negotiate, but rather than women do not negotiate as frequently as they should.

They believe that women do not know when negotiating is possible or that they often fear to negotiate because they believe that society often reacts badly to a woman asserting her own needs. Babcock and Laschever cite a number of studies supporting their theories. One such study (Babcock 2002) reports that 7 percent of women and 57 percent of the men graduating with master's degrees from Carnegie Mellon had negotiated their salaries--an eightfold difference. A survey by Babcock, Gelfand, Small and Stayn (2002) asked respondents to write about the most recent negotiations they had attempted or initiated. For the men, the most recent negotiation had taken place an average of two weeks earlier. For women, their most recent negotiation occurred a full month earlier. The authors drew the conclusion that men were initiating negotiations more often than women, two to three times more often. However, they also suggest another possible explanation for the gender differential: that men may not really be doing more negotiating but rather that the women were defining negotiations differently than the men. True or False: Men and Women Negotiate Differently with Women A variety of studies have examined whether general attitudes toward men and women affect negotiating outcomes. One such study was quoted in the introductory paragraph of this paper in which undergraduates portrayed male negotiators as self-assured, strong and able to stand firm against compromise, and women as emotional, relationship-oriented and cooperative (Kray, Thompson and Galinsky 2001). Some of these studies have found that both men and women expect women to have lower aspirations in negotiations. In the "ultimatum game," researchers give two people a certain amount of money to divide. One person, the "proposer" suggests a division of the money, while the other person, "the responder" decides whether to accept this offer. If the responder rejects the offer, both players get nothing and the game is over. One study (Solnick 2001) found that men and women made less generous offers to female responders than to male responders-12 percent lower on average. A study of new car dealerships revealed that salespeople quoted women significantly higher prices than they did men who used exactly the same scripted bargaining strategies as the women (Ayres and Siegelman 1995). Bias against women in purchase negotiations of cars have been cited as one of the reasons for the disproportionate popularity of the fixed price Saturn car brand with women who make up 63% of Saturn buyers (Babcock and Laschever 2003). True or False: Women are superior integrative bargainers Most of the evidence presented thus far would fall into what the literature on gender and calls the "deficit model." In the deficit model, by far the most common, the focus is on the skills that men have and women lack, i.e. "Women are too cooperativeTheir aspirations are too low." Another model used to explain gender differences in negotiation is called the "valuing difference model" which argues that articulating a woman's point of view that brings heretofore unnoticed benefits to the negotiation process and the agreements it produces (Kolb 2002). From this perspective, a focus on relationships, the skills of empathy, the ability to manage conflict and collaboration simultaneously could give women an advantage in negotiations, particularly integrative bargaining.

Integrative bargaining, as espoused by books like Getting to Yes by Fisher and Ury (1992), emphasizes capturing the interests of others to promote mutual gains, which requires empathy and understanding. Integrative tactics (asking questions, listening, sharing information and trying to find solutions that satisfy both sides) differ dramatically from competitive tactics that can be effective in classic distributive negotiations. These behaviors are those at which women are stereotypically believed to excel. Earlier in this paper, some evidence of women being more cooperative and more likely to share information was discussed in the context of this characteristic being a liability. However, in the context of integrative bargaining, this weakness could be a strength for its contribution to mutual gains. Similarly, if women are more "relationally-oriented" and less likely to be individualistic (a detriment in distributive bargaining situations), this is positive from an integrative bargaining standpoint. More recently the phrase "feminization of management" has been used to demonstrate that stereotypically feminine traits such as inclusivity, emotional sensitivity, and expression are legitimized and valued. However, the empirical evidence associating stereotypically feminine characteristics with outcomes is not necessarily positive. Calhoun and Smith (2002) test whether a feminine concern for other is correlated with joint gains for men and women. They find that for women to achieve high joint gains (in this case profit) they need to be prepared to pay more attention to their own needs, probe for more information and stand firm on their interests. Without this preparation, they concede too easily. For men, looking out for themselves yielded the highest joint profit; so they had no need to attend to the interests of the other party. This study and others in this tradition call into question the idea of valuing feminine skills. III. What are the Consequences of Gender Differences in Negotiating Styles? With this conflicting body of evidence, it is difficult to draw conclusions on what differences men and women have in negotiating styles, let alone estimate the consequences of those differences. Furthermore, most of the studies addressed thus far test the ramifications of gender differentials in an experimental setting. Few studies measure negotiation performance in negotiations where "real" situational power and status actually do differentiate the negotiators. Most of the literature on consequences of gender differences could be better characterized as compilations of anecdotes. Money Some have attempted to quantify the ramifications of gender differences in negotiating style to differences between men and women, particularly with respect to compensation issues. In the year 2000, women's annual earnings were 73% of men's annual earnings, a relatively stagnant level, up only 1.5% from 1990. Babcock and Laschever described anecdotes that attribute this inequity to their theory that women negotiate less frequently than men, although it would be nearly impossible to prove causality with all the confounding factors present. A more micro level study by Babcock (2002) was the Carnegie Mellon study mentioned earlier in this paper in which eight times as many men as women graduated with master's degrees from Carnegie Mellon negotiated their salaries. The men who negotiated were able to increase their starting salaries by an average of 7.4 percent, or about $4,000. In the same study, men's starting salaries were about

$4,000 higher than the women's on average, suggesting that the gender gap between men and women might have been closed if more of the women had negotiated their starting salaries. Another study calculated that women who consistently negotiate their salary increases earn at least $1 million more during their careers than women who do not (Pinkley and Northcraft 2000). Power Although negotiation is most commonly linked to negotiations over compensation and purchase, it is in a larger sense concerned with how people acquire privileges and power. While few people have linked these historical inequities with a women's deficiencies in negotiating skills, it is clear that women will need negotiating skills to close the gap between themselves and men. Women make up a small percentage of high-level elected officials in most countries and few of Fortune 500. In 2001 in the U.S. women held only 2.5 percent of the top jobs at American companies and only 10.9 percent of the board of directors' seats at Fortune 1000 companies (Babcock and Laschever 2003). However, it is difficult to determine the direction of causality of these inequities with any certainty. For example, if women have lower aspirations (as we saw in many of the studies described in section II), are their aspirations lower because they traditionally occupied subordinate positions in society? Or have women occupied less advantageous positions of power because they have lower aspirations? I will discuss more about how inequities in power may affect negotiation outcomes in the following section. IV. Why might differences in negotiating behavior exist between men and women? What explains any differences we may have seen? Why might women be more cooperative, more integrative, set lower aspirations or be judged to have lower aspirations than their male counterparts? Biological and Historical Differences Researchers have looked for some basis in biology and in history to explain why differences between the negotiation styles of men and women might exist. One prominent argument is that a woman's social development and the mothering role she often plays, leads her to emphasize nurturance and support in her social relations whereas men are groomed for separation and individuation (Kolb 2002). Another theory that is advanced is that women have historically been less aware about their market valuetraditionally men have been judged by their material assets, and women by their success in domestic realm (Babcock and Laschever 2003). Another common explanation for gender difference is that of situational power (Menkel-Meadow 2002). As discussed in Section III, women currently have less access to power. If powerful people are more effective in negotiations, then power, not gender, could be the dominant variable in negotiation outcomes. When women achieve positions of power, they will exhibit the characteristics of powerful negotiators (whether from a competitive or an integrative perspective). If this theory is true, since gender is merely correlated with low power or low status, findings of gender differences are byproducts of a different variable relationship. Psychological Differences Others argue that gender and status operate in an additive model that can produce more complex dynamics in assessing negotiating behavior. Women in positions of power exhibit different negotiating

behaviors and different outcomes than men in high-powered settings, and women and men with little power likewise behave differently (Menkel-Meadow 2002). The additive model was supported by a 14-country study (spanning Latin America, Asia, Eastern and Western Europe) each time controlling for occupational status with similar results (Smith, Dugan and Trompensaars, 1997). This meant that even women who were in higher status jobs fell less control over their situation relative to men in similar positions. Psychologists explain this differential through a "locus of control" that measures the extent to which individuals believe that their behavior influences their circumstances. This scale gives the result that women are more likely to believe that others control their circumstances, while men are more likely to believe that they can influence their circumstances and opportunities through their own actions. Another theory that provides some insights into the fluid character of gender as a variable is that stereotypes can impact the degree to which gender affects outcomes. In a study, gender differences were mediated by the performance expectations set by negotiators (Kray, Galinsky and Thompson, 2001). When masculine stereotypes are associated with negotiation effectiveness, men outperform women. Similarly, when bargainers link negotiation successfulness with stereotypically feminine traits, women outperform men. When negotiators are told that masculine traits such as self-interest, assertiveness, rationality and limited displays of emotion are associated with inferior outcomes, women out perform men. And when negotiators are told that feminine traits -- listening well, being more communicative, and empathetic - yield poor outcomes, women have worse outcomes than men. However, when gender-neutral stereotypes are activated, men continued to outperform women, suggesting that men do have some inherent advantage in negotiation situations. V. How can women (and men) improve their negotiating skills? Lesson #1: Learn your market value. While it has been shown that women generally set lower goals for themselves in negotiations than men in negotiations, it has also been shown that controlling for differences in goals has been shown to eliminate performance differences between men and women (Stevens, Bavetta and Gist 1993). This suggests that women need to carefully consider their frame of reference when negotiating to achieve parity with men. One way for both sexes to have a proper reference is to research the market value of the object of their negotiations. For example, before negotiating salaries, a job candidate should research salaries for similar positions, through media, published data, networks and acquaintances in similar fields so that they have a thoroughly educated reference point. A study (Major, McFarlina and Gagnon, 1984) which asked men and women to assign themselves pay for a task found that men paid themselves 63 percent more on average than the women did. However, when salary histories were provided for this task, the average amounts male and female subjects pay themselves are about the same. This supports that idea that women, when provided with appropriate comparison information of market value, will override an inaccurate sense of self-worth.

Lesson # 2: Know your Strengths-and Exploit Them The gender stereotype and negotiation study (Kray, Galinsky and Thompson, 2001) yielded the result that men outperform women even when gender-neutral characteristics are associated with outcome success. The authors conclude that it is not enough to make gender irrelevant to diminish the outcome gap between men and women-but that women need to be extremely aware of their positive qualities and how to use them in each negotiation in the most effective way to gain the most favorable outcome. For example, if a woman feels she is more collaborative, she should take steps to insure that the negotiation unfolds as an interest based (integrative) dialogue rather than a positional dialogue (Fisher and Ury, 1992). This advice is equally applicable to a man who feels that aggressive negotiation behavior, such as making extreme demands or bullying the other side, is not his style. Many authors conclude that rather than using their own style, women should act in a more self-interested way. However, this assumes that these behaviors are neutral in the sense that men and women can use them interchangeably. Even if we were to assume that women could adopt "more masculine" negotiating behaviors easily, using a negotiation style that best suits one's personality will diminish some of the anxiety that may lead to a less than favorable negotiation outcome. VI. Conclusion Section I laid out the framework of this paper which was to identify differences in the negotiating styles of men and women and identify the consequences, causes and solutions to any differences recognized. Section II recounted evidence substantiating and disproving some of the claims made about gender differences in negotiating styles. Some studies showed that women are more cooperative, while others studied countered this evidence. A more conclusive body of evidence showed that women set lower aspirations than men in negotiations, although one study showed that when the lower goals of women and differences in status are controlled for, men and women do equally well. Some survey evidence is presented that women do not take advantage of opportunities to negotiate as frequently as men do in similar situations. Although this theory is plausible, it is hard to prove or disprove it because it requires study subjects to identify opportunities that they did not take. Evidence is also presented that says that men and women negotiate expect women to accept less favorable outcomes, which is consistent with the evidence provided earlier of women setting lower aspirations than men in negotiations. We also examine the possibility that women have superior integrative negotiating styles, with inconclusive results. Section III identified possible consequences of differences in male and female negotiating style in the areas of money and power. This is a nebulous task, considering that we are hardly sure of what the differences are. Although it is possible to identify consequences on the level of small studies, data constraints and the near impossibility of attributing causality make any estimates of the costs of gender differences in negotiations, just estimates. Section IV delves deeper into the theories behind why men and women might negotiate differently, offering causes that range from the historical to the biological to the psychological. Section V identified two concrete recommendations for reducing the gender gap in negotiations that apply equally to both men and women. The first recommendation is to become aware of the market value of whatever is being negotiated (whether it is a salary or a car or a divorce) so that a

reliable reserve and aspiration price are available. The second recommendation is that a person should be aware of their strengths and weaknesses as a negotiator and use those strengths to the greatest advantage to avoid being influenced by negative stereotypes. Towards a More Nuanced Approach of Gender Studies in Negotiation The lack of conclusive evidence for most of our questions suggests that more research needs to be done. Since research such as the "stereotype threat" study quoted in this paper suggest that gender is a fluid characteristic, more research exploring both when gender is or might be critical in a negotiation could shed light on many issues. In particular, are there certain types of negotiations that active gender differences? Another important topic is when and how the significance of gender (in the demographics of the negotiators) might vary. I briefly addressed how variation among women (particularly with respect to power) might affect outcomes. However, there is an important "diversity" literature on gender and negotiations that focuses on the differences among women, by race, ethnicity, class, and other dimensions, that suggests that the conceptualization of a woman's negotiation style may be artificial, or at the very least, less meaningful than some of the literature might demonstrate. Identifying and understanding gender related differences in a nuanced way will help everyone, not just women, better equip themselves to negotiate. Appendix: A Superficial, but Entertaining Analysis of the Sally Swansong Negotiation Results An examination of results of the Sally Swansong negotiations in WWS 596 (fall 2004) found no statistically significant differences in the outcomes for males and females in their respective roles. Rather, a greater (but still statistically insignificant) effect was found in the variable of MPA status, which showed that MPAs received less favorable outcomes for their role than their non-MPA classmates who are MPPs or in other department. However, this sample size is very small (n=20) and does not contain any other controls or interaction variables that might be relevant, such as United States citizenship (that would help control for culture and language effects) or aspirations of the role players prior to the negotiation. So let's just consider that this regression is for fun. The Data The data considered is from the Sally Swansong negotiations (October 2, 2003) that took place in the 596a and 596b Negotiation classes. The results from 20 negotiating pairs are considered. (There were originally 21 pairs, but one pair is dropped because the participants misunderstood the directions). Each pair consists of a business manager and an entertainment agent. The controlling variables are as follows. Mgrfem=Business Manager role player is female if variable =1, mgrfem=0 if male. Agenfem=Sally's agent is female if variable =1, mgrfem=0 if male. Mpamgr=Person in business manager role is MPA if variable=1, MPP or other if mpamgr=0 Mpaagent=Person in Sally's agent role is MPA if variable=1, MPP or other if mpaagent=0

The Statistics . reg outcome mgrfem agenfem mpamgr mpaagent Source Model Residual Total SS 42395833.3 425541667 467937500 df 4 15 19 MS 10598958.3 28369444.4 24628289.5

Number of obs F( 4, 15) Prob > F R-squared

20

= = =

0.37 0.8238 0.0906 -0.1519 5326.3

Adj R-squared = Root MSE =

outcome

Coef.

Std. Err.

P>|t|

[95% Conf. Interval] 5418.313 5251.646 5134.815 7301.482 11115.65 4115.646

mgrfem

83.33333

2502.982

0.033

0.974

agenfem

-1083.333

2917.333

-0.371

0.716

mpamgr

3500

3572.989

0.980

0.343

mpaagent -1250

3965.022

-0.315

0.757

7201.245 9701.245 22016.31 36150.35

_cons

29083.33

3315.593

8.772

0.000

Interpretation of Results The constant indicates that the average outcome for male, non-MPA's in this negotiation (regardless of role) was $29,083.33 Mgrfem: The coefficient on the business manager female variable is positive, and the value indicates that females in the business manager role pay Sally $83.33 or more on average than males in the same role. The positive sign on this variable corresponds with a slightly less favorable outcome for women, although the coefficient is extremely insignificant (statistically). Agenfem: The coefficient on the Sally's agent variable is negative, and the value indicates that women in that role achieved $1083.33 less in compensation for Sally, another inferior outcome for women. Again, this is a statistically insignificant finding, but with such a small sample, it would be extremely hard to achieve statistical significance, so the results may be suggestive of some negative outcomes for women. MpaMgr: MPAs as business managers paid out $3500 more on average to Sally than their non-MPA counterparts, a result that gets a little closer to statistical significance. Non-MPA status (which generally means MPP or auditor from some other department) could be a proxy for age or power, since most of the non-MPAs are older and more accomplished in their respective fields than MPA students. Mpaagent: MPAs as agents receive $1250 less than their non-MPA counterparts.

Bibliography Ayres, I. and Siegelman, P. Race and Gender Discrimination in Bargaining for a New Car. The American Economic Review, 85 304-341. 1995 Babcock, L. Do graduate students negotiate their job offers? Carnegie Mellon University. 2002 Babcock, L. M. Gelfand, D. Small, and H. Stayn. Propensity to initiate negotiations: A new look at gender variation in negotiation behavior. Carnegie Mellon University. 2002. Babcock, Linda and Sara Laschever. Women Don't Ask: Negotiation and the Gender Divide. Princeton: Princeton University Press. 2003

Calhoun, Patrick S. and William P. Smith. "Integrative Bargaining: Does Gender Make a Difference?" International Journal of Conflict Management. (1999) Callahan-Levy, C.M. and L.A. Messe. Sex differences in the allocation of pay. Journal of Personality and Social Psychology. 1979 Farber S. R. and M. Rickenberg. 1999. Underconfident women and over-confident men: Gender and sense of competence in a simulated negotiation. Yale Journal of Law & Feminism 11: 271-303. Fisher, R. and W. Ury. Getting to Yes: Negotiating Agreement without Giving In. New York: Houghton Mifflin. 1992 Kolb, Deborah M. "Negotiations through a Gender Lens." Center for Gender in Organizations. Working Paper No. 15. May 2002 Kray, Laura J. Adam D. Galinsky, and Leigh Thompson. "Reversing the Gender Gap in Negotiations: An Exploration of Stereotype Regeneration." Organizational Behavior and Human Decision Processes. Vol. 87 No. 2 March 2002 pp. 386-409 Kray, L. J., Thompson, L. and Galinsky A. Battle of the Sexes: Gender stereotype activation in negotiations. Journal of Personality and Social Psychology, 80, 942-958, (2001). Major, B., D.B. McFarlin and D. Gagnon Overworked and Underpaid: On the nature of gender differences in personal entitlement. Journal of Personality and Social Psychology. 1984 Menkel-Meadow, Carrie. "Teaching about Gender and Negotiation: Sex, Truths and Videotape." Negotiation Journal October 2000 Pinkley R.L. and G.B. Northcraft. Get Paid What You're Worth. New York: St. Martin's Press. 2000 Raiffa, H.. The Art and Science of Negotiation. Cambridge: Harvard University Press. 1982 Solnick, S. J. 2001 Gender Differences in the Ultimatum Game. Economic Inquiry. 39:189-200. 2001. Smith, P.B., S. Dugan, and F. Trompenaars. Locus of Control and affectivity by gender and Occupational Status: A 14 nation study. Sex Roles. 36: 51-57 1997. Stevens, C.K. A.G. Bavetta, and M.E. Gist. Gender Differences in the Acquisition of Salary Negotiation Skills: The role of Goals, Self Efficacy and Perceived Control. Journal of Applied Psychology. 1993. Walters, A. E., Stuhlmacher, A. F., & Meyer, L. L. (1998). Gender and negotiator competitiveness: A meta-analysis. Organizational Behavior and Human Decision Processes, 76, 1-29. Watson, Carol (1994) "Gender Versus Power as a Predictor of Negotiation Behavior and Outcomes." Negotiation Journal, 10: 117-127. If you have any comments on this piece, please send them to: gender@princeton.edu