Tournaments with safeguards: A blessing or a curse for women?

Workplace tournaments are one likely contributor to gender differences in labor market outcomes. We investigate a competitive workplace environment that may produce more gender-neutral outcomes: tournaments with safeguards. In our experiment, participants take part in a tournament with a real-effort task and choose whether they want to have a complementary safeguard that guarantees a higher wage for the low ranked. As expected, we find that women are more likely than men to choose such a safeguard. However, obtaining a safeguard comes at a cost. On average, the safeguard causes lower performance, reduces women's relative performance, and creates a gender wage gap. Thus, we provide novel evidence that easing women into tournaments can backfire.