Abstract
We study how psychosocial stress affects willingness to compete and performance under tournament incentives across gender. We use a laboratory economic experiment in which a task is compensated under both tournament and piece-rate schemes and elicit subjects' willingness to compete.
Stress is exogenously introduced through a modified version of the Trier Social Stress Test, and stress response is measured by salivary cortisol levels. We find that stress reduces willingness to compete.
For female subjects, this can be explained by performance: while tournament incentives increase output in the control group, women in the stress treatment actually perform worse when competition is introduced. For males, output is not affected by the stress treatment and lower competitiveness seems to be preference-based.
These results may explain previous findings that men and women react differently to tournament incentives in experiments, as well as gender gaps on the labor market, since many key career events involve competition in stressful settings (e.g. entrance exams or job interviews).