An experimental study of gender differences in agency relationships

We look at gender differences in agency relationships between an employer and a worker. The employer can resort to two different ways of motivating the worker to exert effort. One of these depends on establishing a relational contract, which is based on mutual trust and reciprocity between the employer and the worker. A second type of contract relies more on extrinsic motivations in the form of fines for the worker if the worker is found to be shirking. Our ex ante hypothesis was that women would opt for the relational contract more than men. This conjecture is not borne out by the evidence. By and large, we do not find many significant differences between the genders, other than the fact that women tend to offer more generous contract terms, a fact that is in keeping with prior finding on gender differences in generosity.