Why are men so foolish?

Women might be less competitive, but studies show they're also smarter candidates, stock pickers and more

Published February 17, 2013 6:00PM (EST)

    (<a href='http://www.shutterstock.com/gallery-160669p1.html'>ollyy</a> via <a href='http://www.istockphoto.com/'>iStock</a>)
(ollyy via iStock)

Excerpted from "Top Dog: The Science of Winning and Losing"

For the first time in human history, women and men commonly compete side by side. Most of the aggressive, ambitious, daring things we attempt to accomplish are done together.

But do men and women compete the same?

Many recent findings in scientific research reveal gender differences – differences in when they choose to compete, differences in risk taking during competition, different responses to the stress of competition, and different strategies for dealing with that stress. Men are quicker to bond with teammates; women are more willing to befriend competitors. Women are less rattled by being ranked, especially when that ranking isn’t near the top. Men are overconfident of their abilities, while women underattribute success to their own skills. Men get more competitive under time pressure, while women get less competitive under time pressure. Men rate their teammates and competitors lower in ability – women rate them higher.

But these are all averages; they don’t necessarily apply to any one man or woman. So the question remains whether these average differences are truly meaningful, especially compared to the broader spectrum of individual differences. Are those scientists making a mountain out of a molehill here? Are the nuanced differences in competitive style significant enough to actually be helpful in maximizing their performance?

Working with this science can feel like working with flammable compounds or radioactive materials. Initially, we were very reluctant to entertain the line of inquiry. But after years of careful study, and having interviewed the scholars whose work is most compelling, we’ve come to conclude that some of the research is simply too important to ignore.

*   *   *

In 2010, Tommy Sowers decided to run for Congress. The question was, from which district?

Sowers, then a professor at West Point, had served two tours in Iraq; he had been an Army Ranger and a Green Beret. Between going to college at Duke and his various military posts, the decorated war hero had a number of legitimate places he could call home.

Eventually, Sowers decided on moving to his childhood home of Rolla, Mo.; he'd run as a candidate for the state's eighth congressional district. But the Eighth was likely the most conservative congressional district in the nation. No Democrat had won that seat in 30 years.

“There was just no talking him out of it," recalled Democratic Party strategist Paul Begala.

But it wasn’t even close. Sowers only received 29 percent of the vote.

One has to ask: was this daring, or was it foolish?

All over the country, there are candidates willing to take on such long odds. But, like Tommy Sowers, they are almost all men. Even though studies have shown that when women run for office, they raise just as much money as men, and they win just as often as men – very few women are willing to put their names on the ballot. According to Rutgers University's Center for American Women and Politics, only four women filed out the forms for a gubernatorial run in 2012.

In fact, even when you go down the food chain to survey the kinds of people who might one day run for office in the future – lawyers, businesspeople, community activists, educators – and you ask them if they’ve ever even considered running, just contemplated it, men are 35 percent more likely to have considered it.

The question is why. Elections are intense, grueling competitions, held in public. Is there something about competing that scares talented women away? That’s been the prevailing theory. But new science – from a spectrum of domains inside and outside politics – reveals that the real reason for the candidate-gap is gender differences in how women and men judge risk.

Sarah Fulton, a professor of political science at Texas A&M, surveyed 835 men and women currently serving in their state legislatures, trying to see how many of them were considering a race for a seat in the U.S. Congress. She also asked them what their odds of winning were.

Analyzing the state representatives' responses, Fulton concluded that ambitious male state legislators will run for Congress if they have any chance to win. Ambitious female legislators will run for Congress if they have a good chance to win.

The tipping point seems to be around 20 percent odds. When the odds of winning are below that, almost all the candidates will be men. When the odds of winning are better than that, women jump in the race. In fact, when the odds are decent, women will compete in the election even more than men will.

A study of elected Texas judges confirmed Fulton’s core finding. As did a study of New York state trial court judges. When the odds are actually good, women will compete (by entering the race) more than men. They just refuse to waste time with losing.

"I was surprised that women were thinking so much more about the probability of success as supposed to men," said Fulton. "I'm not saying that men are not strategic, but women are more responsive to the costs and benefits. You could vary the chance of winning, but it isn't going to alter the men's running all that much," explained Fulton. "But for women, it's a really strong, steep slope. They're extremely responsive to the chance of winning."

Fulton's findings changed the paradigm across all the social sciences. The ambition gap goes away, and even reverses itself, if the odds of success are plausible. Men like Tommy Sowers will gamble on impossible odds. Women won’t.

Perhaps this helps explain the gender-gap in Silicon Valley, where among startup employees, women are still outnumbered by men two-to-one, and only 4.3 percent of venture-funded companies are run by women CEOs. What if the long-odds nature of technology ventures looks like a bad risk to most women?

It appears that there is a gender bias to the typical risk-reward calculus. Men tend to focus on the reward. The larger the reward, the more they ignore the odds. Women are the opposite: they tend to focus on the risk, and larger rewards are less relevant.

*   *  *

Stanford economics professor Muriel Niederle has been interested in women’s underrepresentation in business boardrooms since she was a high schooler. She was in an advanced math track that was equally populated by boys and girls. “But when they went to college, so many of the women studied comparative literature or theater, while all the guys went to engineering or math or physics,” she said. “I thought it was odd.” Were women avoiding harder subject areas because they were more competitive? When Niederle graduated from Harvard with her Ph.D. in economics, she thought it would be an interesting phenomenon to research.

Niederle’s body of research begins with a simple lab challenge. Reflective of her own background, participants had to do some math. They were given sets of five two-digit numbers to add. They had five minutes to get as many done as possible. To make sure they worked hard at it, she paid them by the set: 50 cents for each set completed. Men and women did equally well, averaging about 10 sets completed and earning $5. (Each set took about 30 seconds.)

Go ahead and try a set:





+ 69


Later, they get to do it again, this time in a room of four people all facing the same task. This time, they had a choice. Did they want to be paid by the set, like in the first round? Or did they want to make it winner-takes-all? The pot would likely be $25 to $30.

Despite the fact men and women had performed equally well in the previous round, a staggering gap emerged. Seventy-three percent of men are game to play winner-takes-all, but only 35 percent of women want to do it.

Niederle has replicated this time and again, and now many other scholars use her paradigm as well. “The data is so clear, the gap is so big,” Niederle said.

At first glance, it looks like women are afraid of competing in a win-lose situation. And in the thirty or so news articles reporting Niederle’s work, that’s often been the headline. But think of it rationally for a moment. You also have to take your own speed into account. Yes, women are being a little cautious here, but unless you are very fast at math and quite confident of your ability, your expected return is higher being paid by the set.

For those 73 percent of men who want to enter the tournament, one of two things is going on in their heads:

1) They know they’ll very likely lose, but they don’t mind because they want someone else to get the $25 pot.

2) They are under the illusion that they have a good chance to win.

This is not Lake Wobegon. Seventy-three percent of men are not above average. Which means there are a lot of men who falsely believe they’re going to win. It’s men who don’t really recognize the odds and are overconfident. They mostly think about what they’ll win. Challenged to compete, they can’t resist.

However, it doesn’t take much to get women to compete more. In a recent study, the classic Niederle experiment was replicated with MBA students. The only change in the protocol was that right before doing the experiment, the MBAs were given one of two short surveys. One survey asked about their gender and family, and how many kids they had. The other survey quizzed them about their professional plans – what was their expected salary after graduation, et cetera. Women MBAs who took the family survey were reluctant to compete. Women MBAs who took the professional survey had no such reluctance. Even more of them wanted to compete than male MBAs.

To get women to compete, they need to be in a social context where competing is relevant to their success. When they choose to be overtly competitive, women, it seems, are more attuned to the context than men are.

*   *   *

When parents send their children to elite schools, they’re often aware of the potential downside: elite schools are competitive cauldrons. What if my child isn’t quite up to it?

Northwestern University professor C. Kirabo Jackson has discovered that girls handle the hothouse environment differently than boys. Girls tend to thrive in these environments, across the board, and the more elite the school, the better they do.

Not necessarily so for boys.

The first piece of evidence came from his study in the small Caribbean nation of Trinidad & Tobago. Jackson got the data on every fifth-grader in the country in 2000. He then compared their fifth grade scores on a national standardized test with their tenth grade scores. He cross-referenced these scores against what school they had attended -- all the schools in Trinidad & Tobago are ranked, and these ranking are widely published.

After he set up his models and ran all the numbers, “I thought I must have made a mistake,” Jackson said. What he found was boys and girls have different outcomes from attending elite middle schools. “Boys seem to be more discouraged,” Jackson said.

Pointedly, Jackson noted that, for boys who went to the most elite schools, their math scores suffered. They would have learned more math if they had gone to a slightly easier school.

Could it really be true, Jackson wondered, that boys don’t handle the elite competitive cauldrons as well as girls? Aren’t boys supposed to be more competitive than girls?

Jackson started asking other researchers if they were seeing a similar pattern – was anyone else finding that boys were hurt by being in a more competitive environment? Papers started coming in from around the world.

One study tracked 2,134 students attending an elite Chinese university. Chinese colleges assign students to dorms: the same three or four people will share one very small room for the entire four years of school. Researchers tracked these quartets over time, and they found that the best-achieving woman served as a “shining light” for her roommates. She pulled her fellow roommates’ grades up over time. But the strongest male roommate had the opposite effect; his presence seemed to drive down his roommates’ grades year to year. Rather than being inspired by their high-achieving dormmate, “Men seem to be depressed by their strongest peer.”

British researchers have reached a similar conclusion, after looking at test scores of 1.3 million children in the British public schools. The very strongest boys, the “Top Five Percenters,” tended to have a negative effect on other boys who rank below them. There was no such effect for equivalent girls, who only got benefits from attending a very top school with top students.

A fourth study had researchers from Harvard, Yale and Dartmouth come together to follow kids who entered public school lotteries for charter school spots. If you’ve seen movies like "Waiting for Superman," you know that these charter schools are supposed to be saviors, the road to college. On the whole, their data was on impoverished children in the American South. Just as you’d expect, girls who won the lottery and attended their first-choice charter school increased their odds of going to a four-year college. But boys who lost the lottery (and didn’t go to the charter school of their dreams) had better odds of attending a four-year college than boys who won the lottery.

That’s astounding. Something was going wrong during high school for many boys who attended these charter schools.

Looking at the papers together, Jackson saw that each confirmed the other. Around the world, a pattern was becoming clear.

“The bottom line is, if you have a girl, I would put her in the best school as possible and have her around the smartest peers possible,” Jackson summarized. “If you have a son, you should put them in the school with the brightest teachers, but you should be wary of putting him in a hypercompetitive environment. Being a small fish in a big pond is particularly bad for boys,” Jackson added.

This is not, as it first seems, a failure to compete on the part of boys. It’s an example of how the psyche gets worn down when you overcompete – when people compete too much, always interpreting their world through the lens of winners and losers.

Boys who fall behind find it difficult to ask for help, not wanting to admit their troubles. Girls ask for help and get it, bringing them back into the fold.

Most competitions are held over a defined period of time – the 60 minutes of football. When the contest is over, competitors can relax, leave it behind, and separate themselves from how well they did in the game. In elite schools, this isn’t the case. The competition for good grades is endless; the comparisons never cease. It’s not just a game – it’s their life, with real outcomes.

As religious scholar James Carse explained, finite games have a beginning, an end, and the goal of winning. Between games, there is recuperation and restoration. Infinite games, by definition, can never end, and, since no winner is ever declared, the goal instead is to just to stay ahead. With infinite games, there's no rest – only a waxing and waning of competitive intensity.

It’s in these infinite games, the evidence suggests, that women survive better than men. By not always caring about winning and losing, they thrive. Their competitive style is more successful.

* * *

Let’s go back to this finding that men tend to be overconfident and think their odds of winning are better than they really are. It's the lab version of the decision to run for Congress being made by the state legislators. Women are savvy about the odds, men are good at ignoring the odds.

Do these optimistic biases show up elsewhere in the real world? What about in an industry like Wall Street, where judging risk accurately is the name of the game?

Women broke into Wall Street in large numbers in the 1980s, when investment banks began recruiting talent from the top colleges and business schools. These were high prestige, high salaried jobs that the women were trying to nab. (In 2006, the average stock analyst on Wall Street made $590,000 a year.)

During the 1980s, of all the financial analysts covering stocks, 8 percent were women. This rose through the 1990s, and in 2001 it peaked at 20 percent. Since then, the percentage of female analysts has sadly fallen, to 16 percent. Were women underperforming?

What if we told you the opposite was the case – that female financial analysts have statistically outperformed men, by a meaningful margin?

Dr. Alok Kumar, from the University of Texas's McCombs School of Business, became interested in gender and financial projections when he read studies on whether women CFOs are better than male CFOs at maximizing shareholder value. They were, but the dataset was not large enough to be truly conclusive. In search of a larger dataset, he went to the Thomson Reuters’ Institutional Brokers Estimate System (I/B/E/S). This had every financial earnings projection made by every stock analyst on Wall Street from May of 1983 to June of 2006 – a total of 2,856,198 forecasts issued by 18,292 analysts who covered 21,107 stocks. These were not “Buy/Sell” ratings; they were projections of the earnings-per-share each company would profit in future quarterly financial performance.

The first thing Kumar found was that women analysts outperform men: their projections are 7.3% more accurate. Women also do less “herding,” clustering near the industry average to avoid being controversial and sticking out. All-in-all, women are actually more bold in their predictions than men. And to top it off, they do all this despite having fewer years of experience on the job.

Kumar looked to make sure that women weren’t just outperforming in the industry sectors where they make up a larger proportion of the analysts, such as the Apparel/Clothing sector, where 40% of the financial estimates were made by women. Stocks are normally categorized into 48 different industries. Of those, male analysts outperformed women in only 15 industries. Women analysts beat the men in 33 industries.

The question Kumar was interested in started to change. If women were better at financial estimates, did the market realize this?

Kumar investigated how the market moves after a stock analyst revises his or her earnings projection. Stock prices show more movement after a revision from a woman – suggesting that the Street trusts female analysts more than men.

Since Kumar’s research was published in 2010, variations of it have been reproduced in Europe, looking at Buy/Sell recommendations. (The lesson: when a woman tells you to sell a stock, listen to her.) Studies have also looked at when women are on the audit committee, and when women are on a company’s Board of Directors. The general pattern is that men drive a company to take more risk, but women are more accurate in projections and are better at keeping companies out of trouble.

It’s good to stay out of trouble – especially for large companies – but being an entrepreneur is all about taking risk. It’s sometimes hard to say whether these tendencies are a good thing or a bad thing.

The open question remains – is all that risk-calculation ultimately to women's benefit? Of course, both men and women do some sort of risk-reward calculation when deciding to enter a competition. But it's women who tend to focus on odds, and it’s men who focus on what they’ll win.

Researchers have found that the more people focus on their odds of winning, the less likely they’ll go for it. But the more they focus on what they’ll win if they succeed, the more likely they’ll go for it. People standing in line for Powerball don't think that their odds of winning are one in 195 million; instead, they're thinking about the $195 million they would take home. People who write screenplays don’t think about the terrible odds (only 1 out of every 363 registered scripts are purchased every year); they think about seeing their story on the silver screen.

The Egyptian men and women who took to Tahrir Square did not decide to act because they believed in the likelihood of success: what pushed them forward was the prize of freedom.

Maybe we need more Tommy Sowerses in the world. Yes, Sowers' race didn't work out. But the odds didn't really look any better for Steve Jobs, and he did just fine. The world needs underdogs who will take a fighting chance. If they dwelled on the odds, they’d never do it.

One of Paul Begala's favorite scenes in a movie is from "Dumb and Dumber." Jim Carrey's character asks Lauren Holly's what are the chances of them having a relationship. "Not good," answers Holly's character.

"Not good like – one in a hundred?" asks Carrey.

"More like –" Holly replies, "one in a million."

Carrey takes this in for a moment.

Then he responds: "So you're telling me there's a chance." And he screams with delight.

Excerpted from "Top Dog: The Science of Winning and Losing" by Po Bronson and Ashley Merryman. Published by TWELVE books. Copyright 2013. Reprinted with permission of the authors and publisher.

By Po Bronson

Po Bronson is the author of "The Nudist on the Late Shift -- And Other True Tales of Silicon Valley" and two novels, "The First $20 Million Is Always the Hardest" and "Bombardiers."

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By Ashley Merryman

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