Within- versus between-country differences in risk attitudes: implications for cultural comparisons (original) (raw)
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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-national differences in risk preference and lay predictions
Journal of Behavioral Decision Making, 1999
This research explores whether there are systematic cross-national dierences in choice-inferred risk preferences between Americans and Chinese. Study 1 found (a) that the Chinese were signi®cantly more risk seeking than the Americans, yet (b) that both nationals predicted exactly the opposite Ð that the Americans would be more risk seeking. Study 2 compared Americans' and Chinese risk preferences in investment, medical and academic decisions, and found that Chinese were more risk seeking than Americans only in the investment domain and not in the other domains. These results are explained in terms of a`cushion hypothesis', which suggests people in a collectivist society, such as China, are more likely to receive ®nancial help if they are in need (i.e. they could be`cushioned' if they fell), and consequently, they are less risk averse than those in an individualistic society such as the USA.
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.
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.
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.
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.
Relations between risk attitudes, culture and the endowment effect
Engineering Management in Production and Services
The main purpose of this research was to examine whether systematic cross-national differences existed in risk preferences. As a part of the survey, it was also tested how the subjects decided on behalf of their friends. Considering the type of risk-taking and the role of endowment plus relevant cultural backgrounds, the answerers were grouped, and each segment could be identified. Finally, this segmentation could be correlated with behaviour in risk decisions. Here, the Allais situation was used testing respondent behaviour in risky decision-making on behalf of others. This paper used the validated DOSPERT Scale, measuring risk perceptions and risk preferences of international students (n=244). The used survey contained different risk attitudes depending on decision making and involved the following criteria: Ethical, Financial, Health or Safety, Recreational, and Social Risks. Applying the DOSPERT Scale, differences were also found between ‘Risk-Taking’, ‘Risk-Perceptions’, and ‘E...
Cross-National Differences in Risk Preferences
2021
Purpose: This research aimed to investigate cross-national differences in risk preferences to uncover whether risk appetite, consisting of perceived and actual risk, differs amongst demographics. This paper aims to understand whether Polish and Dutch business students differ in their risk preferences and how this impacts strategic management. Methodology: This research adopts a non-experimental quantitative correlation research design. The data examined is collected using a cross-sectional survey that is digitally distributed to the sample population. The survey consists of questions identifying risk appetite and demographic factors through the five-point Likert scale. Theoretical Perspectives: This study is based on contradicting views from Damodaran (2007), Gándelman and Hernández-Murillo (2015), and Hofstede and Minkov (2010). These authors explained risk preference variations amongst nationalities. These theories are combined with Kahneman and Tversky's (1979) prospect theory. Empirical Foundation: The target sample are Polish and Dutch business students, as they are prospective managers representing the so-called "leaders of tomorrow." The empirical results are derived from 186 survey responses by Polish and Dutch business students of different ages, genders, and educational levels. Conclusion: The conclusions highlight the importance of diversifying between actual and perceived risk preferences due to a significant difference between these two variables. Furthermore, it is concluded that the differences between countries exist, and demographics affect individuals' risk appetite, which impacts strategic management.
Cultural differences in risk: The group facilitation effect
Judgment and Decision Making, 2010
We compared South Koreans with Australians in order to characterize cultural differences in attitudes and choices regarding risk, at both the individual and group levels. Our results showed that Australians, when assessed individually, consistently self-reported higher preference for risk than South Koreans, regardless of gender. The data revealed that South Koreans, regardless of gender composition, were willing to take greater risks when making decisions in group decision-making situations than when they were alone. This is a different pattern from that seen in the Australian sample, in which a risky shift was noted only among males. This difference was attributed to the influence of various cultural orientations (independent vs. interdependent relationship styles). This study also provides a discussion of the implications of these results in terms of cultural differences in attitudes and decisions regarding risk.
Personality and Individual Differences, 2018
Although risk-taking has been found to be associated with economic deprivation, there is little evidence on whether the relation between individual deprivation and propensity for risk-taking is inherent to all individuals, or varies across cultural contexts. Consequently, the present study investigated the interaction effects of macroeconomic factors [Gross Domestic Product (GDP) per capita and Human Development Index (HDI)] in the relationship between individual deprivation and propensity for risk-taking using the World Values Survey data from 58 countries (N = 87,223). On average, individuals in more developed countries (higher HDI) had less propensity for risktaking. In contradiction to this, the positive association between individual deprivation and risktaking was stronger in countries with higher GDP per capita. The present study suggests that the association between individual deprivation and propensity for risk-taking varies with environmental variables assessing the socioeconomic development of a country.