Cross-national differences in risk preference and lay predictions

Christopher K. Hsee, Elke U. Weber

Research output: Contribution to journalArticle

297 Scopus citations

Abstract

This research explores whether there are systematic cross-national differences in choice-inferred risk preferences between Americans and Chinese. Study 1 found (a) that the Chinese were significantly more risk seeking than the Americans, yet (b) that both nationals predicted exactly the opposite - 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 financial 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.

Original languageEnglish (US)
Pages (from-to)165-179
Number of pages15
JournalJournal of Behavioral Decision Making
Volume12
Issue number2
DOIs
StatePublished - Jan 1 1999
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Decision Sciences(all)
  • Arts and Humanities (miscellaneous)
  • Applied Psychology
  • Sociology and Political Science
  • Strategy and Management

Keywords

  • Chinese
  • Cross-cultural psychology
  • Cushion hypothesis
  • Prediction
  • Risk preference

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