Political Connections: Evidence From Insider Trading Around TARP

Abstract

We study with a laboratory experiment how gender and gender matching affect advice giving and how advice following in men’s and women’s entry into a real-effort tournament is affected by gender matching. For advice giving we find that women are less likely than men to recommend tournament entry to advisees that are medium performers, regardless of the advisee’s gender. Furthermore, women maximize less often the expected earnings of advisees that are medium performers. Gender matching does not affect advice giving. For advice following we find that in the intermediate-performance group, men enter the tournament significantly more often than women. Gender matching does not affect advice following either. Overall we find that when it is less clear what the better decision or advice is, gender differences emerge. These results are consistent with findings in other areas that document that gender differences emerge in more ambiguous situation.