Monday, July 4, 2011

INSEAD Working Paper 2011/78/TOM/DS/OB

We present results from two experiments that reveal significant gender differences in ordering behavior in the newsvendor problem. In high margin settings, males tend to order more than females, and they also tend to achieve higher profits. There are no gender differences in low margin settings. We show that the observed gender differences are partially driven by (or mediated by) gender differences in risk appetite. Males tend to prefer taking greater risk than women, and this leads them to order more in the newsvendor problem (in high margin settings). We show that the risk-ordering relationship is related to financial risk attitudes but not to social risk attitudes, and also that the effect is not driven by gender differences in affect, a likely alternative explanation for the results.