They didn’t come here to make friends. They came here to win.
This television adage sums up a semi-controversial but highly effective tactic on the long-running game show The Price is Right. Cutoff bidding, as it’s called, is also the subject of new research from Jason Dana of SOM and Pavel Atanasov of Pytho. Together they studied how use of the not-so-nice but oh-so-successful strategy varies by gender.
What is cutoff bidding? In a game called One Bid, four contestants bid sequentially on an item whose price they don’t know. The bid that comes closest to the actual price without overshooting wins. Fourth bidders, who’ve seen the other contestants’ guesses, have a natural advantage.
Imagine a scenario where the first three contestants have bid $700, $900, and $400 on an item. You’re the fourth bidder and you suspect the item is about $500. Bidding $500—your true best estimate—means you’ll win if the actual price is anywhere from $500 to $699.
But if you bid $401, you’ll win if the price is anywhere from $401 to $699. The practice of “cutting off” another contestant by bidding $1 above them “improves your chances of winning a great deal,” Dana says.
Still, in the eyes of some viewers and contestants, it’s just plain mean. By definition, cutoff bidders make it nearly impossible for another contestant to win. Strategically sound, yes, but “it’s not the most sporting play,” Dana acknowledges. So how prevalent is it?
Dana and Atanasov analyzed 5,958 games of One Bid and found that only 33.4% of fourth bids are cutoffs—less than you’d expect, given the advantage it affords.
Among contestants that do employ the cutoff, however, several intriguing patterns emerged. First, the researchers discovered that men are slightly more likely to engage in cutoff bidding than women—and they cut off women more than men. Female cutoff bidders, meanwhile, are more likely to cut off men than women.
Is this gender bias at work, or something else? To answer that question, Dana and Atanasov considered whether there was any possible strategic explanation for the pattern. Perhaps there’s a sound reason men think that cutting off women (and women think that cutting off men) might help them win.
The researchers looked closely at fourth bids, cutoff and otherwise, and the targets of those bids. (In the example above, the contestant bidding $400 is the target.) Within this larger pool of fourth bidders, contestants of both genders on average targeted men more than women, indicating they perceived men to be in the lead. (In fact, “everyone’s wrong here,” Dana says, because women are slightly more likely to be the leading bidders.)
Discerning whether cutoff bidding can be attributed to strategic play or gender discrimination comes down to who the fourth bidder perceives to be in the lead. This belief could explain why women disproportionately cut off men: they are playing strategically, because they are “over-perceiving male competence,” Dana says; they erroneously think men are in the lead. But it doesn’t explain the behavior of male cutoff bidders, who are playing aggressively against women and can’t claim strategy as a defense. “The key point being that women are more likely to be cut off by men who perceive them to be in the lead than by women who perceive them to be in the lead,” notes Dana.
The pattern is almost certainly unintentional—after all, players have only a few seconds to contemplate their bids—but Dana still views it as a subtle form of discrimination with implications for other situations. The fact that gender bias appears even with hundreds or thousands of dollars on the line indicates that we should expect to see it in everyday interactions, including in the workplace. This might manifest in several ways: first, a general belief that men are more proficient in competitive enterprises; second, a willingness by men to use more aggressive strategies to get ahead; or third, given men already occupy a majority of senior level jobs, gender favoritism could reinforce the glass ceiling and help inequity persist. Whether it’s between a salesperson and a customer or in a B2B transaction, people are likely to subtly change their behavior based on the gender of the person they are interacting with. This can play out as not taking recommendations, acting more assertively in a negotiation, or even deferring the transaction. Regardless of the specific mechanism, the fact that this favoritism exists, write Dana and Atanasov, “may hold back women’s progress in competitive occupations.”