Aspiration Failure, Ethnic Composition, and Competitive Inclination: An Experimental Study

Abstract

How do differences in the competitive inclination of ethnic groups contribute to economic disparity and how does the ethnic composition of a group affect competitive inclinations of individuals from different ethnicities? This paper experimentally investigates how ethnic composition affects the competitive inclinations of those from the Han (ethnic majority) and Yi (ethnic minority). We test the aspiration failure hypothesis that the ethnic minority group has lower aspiration and hence being less competitively inclined. Another possibility is that the differences in stereotypes may contribute to the difference. We find that in homogeneous treatments, which consists of one ethnicity, there is no difference in competitive inclination. However, in mixed treatments where both ethnicities are present in the group, the Yi are less likely to enter tournament than the Han. The difference in aspiration for education attainment has the highest explanatory power for the entry-gap and Yi subjects are on average less likely to have high aspiration, supporting the aspiration failure hypothesis. Using data of subject's scores from national college entrance exam, we find that Yi subjects with low scores are less likely to have aspiration for prestigious universities than low score Han subjects. There is no significant difference in performance in the experimental task between high and low aspiration subjects. Difference in perceived stereotypes, income, parents' education, risk aversion, and performance cannot explain the entry-gap. Overall, our results suggest that aspiration failure of the ethnic minority is a major source of the entry gap.

Keywords: Competitive inclination, Ethnicity, Aspiration, Gender difference

JEL Classification: C91, C93, D91