Research Spotlight: Empirically Testing Scotchmer’s Theory of Sex-Based Risk Aversion

This post will inaugurate a new feature of this blog. At times, whenever I come across a paper or research talk that poses an interesting legal finding or issue, I’ll profile it as a research spotlight. To kick off this feature, I’ll discuss a paper written by a colleague at Florida State University.

Today I attended a talk at the FSU Law School at which Professor Dino Falaschetti presented his paper: “A Difficulty in the Concept of Affirmative Action: Evidence from Females in Legislatures”. The paper empirically tests Suzanne Scotchmer’s theory, which posits that: “(1) winner-take-all games (e.g., promotions in hierarchies) favor inherently risk-taking males, but (2) successful females maintain greater skill on average and (3) see this skill-advantage depreciate with repeated play.”

The paper makes a contribution since the theory has rarely ever been empirically tested. A clever experiment was designed using elections in legislatures in both majoritarian (winner take all) vs. proportional election systems. The U.S. follows the majoritarian electoral system, where the candidate who garners the majority (> 50%) votes wins. Many, if not most, countries follow a proportional system whereby parties and their candidates obtain representation in proportion to the votes they obtain.

The article’s findings suggest a statistically significant result that demonstrates a negative correlation between elected female legislators and winner take all (majoritiarian) electoral systems across time and 130 countries . Ultimately, the author positions these findings as challenging the outcomes of affirmative action programs, since gender may ultimately lead to unintentional results due to the outcomes generated by risk preferences unique to gender type.  I think the paper may also raise some interesting questions related to institutional economics, given that similar outcomes were seen across a broad spectrum of societies and cultures

The link to the article on SSRN is here.

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