Cross-cultural differences in risk perception, but cross-cultural similarities in attitudes towards perceived risk

Elke U. Weber, Christopher Hsee

Research output: Contribution to journalArticle

489 Scopus citations

Abstract

In this study, respondents from the P.R.C., U.S.A., Germany, and Poland were found to differ in risk preference, as measured by buying prices for risky financial options. Chinese respondents were significantly less risk-averse in their pricing than Americans when risk preference was assessed in the traditional expected-utility framework. However, these apparent differences in risk preference were associated primarily with cultural differences in the perception of the risk of the financial options rather than with cultural differences in attitude towards perceived risk. In all cultures, an equal proportion (the majority) of respondents was willing to pay more for options perceived as less risky, i.e., were perceived-risk averse. These results are most naturally explained within a risk-return conceptualization of risky choice. They have practical implications for cross-cultural negotiation and commerce by suggesting the locus of cultural differences in risky choice that may allow for the creation of joint gains.

Original languageEnglish (US)
Pages (from-to)1205-1217
Number of pages13
JournalManagement Science
Volume44
Issue number9
DOIs
StatePublished - Sep 1998

All Science Journal Classification (ASJC) codes

  • Strategy and Management
  • Management Science and Operations Research

Keywords

  • Risk
  • Risk Attitude
  • Risk Perception
  • Risk Preference
  • Risky Choice

Fingerprint Dive into the research topics of 'Cross-cultural differences in risk perception, but cross-cultural similarities in attitudes towards perceived risk'. Together they form a unique fingerprint.

  • Cite this