Discrimination in Two-sided Matching Market Experimental and Theoretical Evidence in Entrepreneurial Finance

To explain the unique persistent gender gap in the US entrepreneurial community, this paper conducts an experiment with real US startup founders. Results show that male entrepreneurs have implicit gender discrimination against female investors due to statistical discrimination. The discrimination is more salient among high-quality and senior investors, suggesting the existence of a glass ceiling for women. However, Asian investors do not suffer from a similar level of discrimination. We further provide a theoretical framework to explain several novel findings in recent experiments and demonstrate how two-sided gender discrimination perpetuates a persistently low female participation rate in entrepreneurial financing settings.