Relations between risk attitudes, culture and the endowment effect (original) (raw)
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Management Science, 1998
The present study assessed cross-cultural differences in the perception of financial risks. Students at large universities in Hong Kong, Taiwan, the Netherlands, and the U.S., as well as a group of Taiwanese security analysts rated the riskiness of a set of monetary lotteries. Risk judgments differed with nationality, but not with occupation (students vs. security analysts) and were modeled by the Conjoint Expected Risk (CER) model?') Consistent with cultural differences in country uncertainty avoidance,(2) CER model parameters of respondents from the two Western countries differed from those of respondents from the two countries with Chinese cultural roots: The risk judgments of respondents from Hong Kong and Taiwan were more sensitive to the magnitude of potential losses and less mitigated by the probability of positive outcomes.
Understanding Cross-National Differences in Risk Through a Localized Cultural Perspective
SAGE, 2016
We examine cross-national differences in attitudes and decisions toward risk by comparing Chinese (collectivists), South Korean (collectivists, but with distinctive localized cultural norms), and Australian (individualists) undergraduate student samples from a balanced cross-cultural perspective. Individual evaluation revealed that risk was least favored by the Chinese students in their attitudes and choices, followed by the South Korean and Australian students. Unlike previous results from South Korean and Australian student samples that exhibited unique shifts toward risky choices indicative of group polarization, the Chinese students did not tend to take greater risks when making group versus individual decisions (i.e., risky shift). This was regardless of the group's gender composition, although the pattern did vary according to financially oriented risk domains. The implications of these results are discussed in terms of each country's indigenous sociocultural norms.
Cross‐Cultural differences in risk perception: A Model‐Based approach
Risk Analysis, 1997
The present study assessed cross-cultural differences in the perception of financial risks. Students at large universities in Hong Kong, Taiwan, the Netherlands, and the U.S., as well as a group of Taiwanese security analysts rated the riskiness of a set of monetary lotteries. Risk judgments differed with nationality, but not with occupation (students vs. security analysts) and were modeled by the Conjoint Expected Risk (CER) model?') Consistent with cultural differences in country uncertainty avoidance,(2) CER model parameters of respondents from the two Western countries differed from those of respondents from the two countries with Chinese cultural roots: The risk judgments of respondents from Hong Kong and Taiwan were more sensitive to the magnitude of potential losses and less mitigated by the probability of positive outcomes.
Culture, Conformity, and Risk Attitudes: An Experimental Analysis
This paper applies cultural differences in conformity to the context of risk attitudes. Study One compared East Asian and British students. Using a salient lottery choice task, with and without observation of peers, Study One revealed no effect of peer observation on the East Asian students' choices. However, the British students were inclined to choose against the majority of their peers. This behaviour is consistent with an individualist culture that places value on uniqueness. Study Two was intended to replicate the results from Study One, using a more diverse population of East Asians and Australians, including non-students. Study Two found East Asians were more likely to choose in-line with the majority of their peers when the size of the majority increases, while no such effect was found for Australians.
Economic Research-Ekonomska Istraživanja
The study analyses the susceptibility to risk-taking behaviour in relation to cultural, cognitive and personality traits. For the requirements of the research, undergraduate students with the same major but from two different cultural regions (Poland and the USA) were examined. In order to better understand them, the ten-item personality inventory (TIPI) methoda 10-item measure of the Big-Five personality dimensionswas used. A domain-specific risk-taking (DOSPERT) scale was used to assess risk-taking, while cognitive aspects of behaviour were measured by a cognitive reflection test. It is important to point out that Polish students reported significantly greater proneness to risk-taking than their American counterparts. It was revealed that participants scoring highly in the cognitive reflection test were characterised with lower risk-taking propensity. Consistent with past research, high scores in extraversion and low scores in conscientiousness predicted overall risk-taking behaviour. As follows from the study, men reported significantly greater willingness to take risks than women.
Risk perception and risk avoidance: The role of cultural identity and personal relevance
International Journal of Research in Marketing, 2008
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Cultural Influences on Risk Tolerance: Evidence for Students in Indonesia
International Review of Management and Marketing, 2020
This paper examined the impact of culture on risk tolerance for students in Indonesia. By using surveys that had been completed by 309 college students, this research used logistic regression as the main method. This research found that there is no evidence that Western Indonesia would score as more risk-tolerant on standard risk assessment questionnaire and would choose portfolio allocations that are riskier than Central and Eastern Indonesia. Parents' higher education has given a significant result to the risk tolerance match. The theoretical and practical implications of this research are discussed. Our findings suggest that differences in risk tolerance are at least partially a product of a culture which is a tribe in each region, but such differences may not always be reflected in actual investment decisions.
The meaning of risk-taking – key concepts and dimensions
Journal of Risk Research
Dealing with and taking risks are central issues of current societies which had been characterised by heightened debates and conflicts about risk (Beck, Giddens). Even though there is good knowledge available, policies and strategies to reduce people's risk-taking are often less successful than expected. Experts are puzzled about common people not following good advice presuming people's lack of understanding. While this might be true in many cases a growing body of research shows, rather than being merely ignorant or misinformed, people often have good knowledge when taking risks. A growing body of research provides knowledge about the complexities, dynamics and contradictions of people's risk-taking. However, there have been little attempts to systematise this body of knowledge. This article contributes to such an enterprise. It suggests distinguishing between different motives for risk-taking, different levels of control and a number of ways how reflexivity about risk is rooted in the social realm. It also explores how risk-taking is part of developing and protecting a valued identity. The article concludes, across different domains there is good evidence for how structural and cultural forces combine and shape risk-taking while people take risks to develop a valued identity and to protect it. Advancing expert's understanding of risk-taking and change people's risk-taking require considering and approaching the larger social contexts and individual risk practices in everyday life.
Models and mosaics: Investigating cross-cultural differences in risk perception and risk preference
Psychonomic Bulletin & Review, 1999
In this article, we describe a multistudy project designed to explain observed cross-national differences in risk taking between respondents from the People’s Republic of China and the United States. Using this example, we develop the following recommendations for cross-cultural investigations. First, like all psychological research, cross-cultural studies should be model based. Investigators should commit themselves to a model of the behavior under study that explicitly specifies possible causal constructs or variables hypothesized to influence the behavior, as well as the relationship between those variables, and allows for individual, group, or cultural differences in the value of these variables or in the relationship between them. This moves the focus from a simple demonstration of cross-national differences toward a prediction of the behavior, including its cross-national variation. Ideally, the causal construct hypothesized and shown to differ between cultures should be demonstrated to serve as a moderator or a mediator between culture and observed behavioral differences. Second, investigators should look for converging evidence for hypothesized cultural effects on behavior by looking at multiple dependent variables and using multiple methodological approaches. Thus, the data collection that will allow for the establishment of conclusive causal connections between a cultural variable and some target behavior can be compared with the creation of a mosaic.