We study the effects of the presence of a negative stereotype on the formation of selfconfidence and on decision making, taking into account ego and self-esteem issues.We show that any stereotype of lower ability leads to gaps in confidence, in participation in risky/ambitious options and in performance. Furthermore, we show how the stereotype survives and even gets reinforced. Considering gender and mathematics, we are able to explain girls lower self-confidence in mathematics, girls underrepresentation in STEM fields, as well as girls lower performance and choices of less ambitious options, especially at the right side of the ability distribution.