Research Article

Cross-national differences in risk preference and lay predictions

  1. Christopher K. Hsee1,*,
  2. Elke U. Weber2

Article first published online: 7 MAY 1999

DOI: 10.1002/(SICI)1099-0771(199906)12:2<165::AID-BDM316>3.0.CO;2-N

Issue

Journal of Behavioral Decision Making

Journal of Behavioral Decision Making

Special Issue: Selected Proceedings of the 16th Research Conference on Subjective Probability, Utility and Decision Making

Volume 12, Issue 2, pages 165–179, June 1999

Additional Information

How to Cite

Hsee, C. K. and Weber, E. U. (1999), Cross-national differences in risk preference and lay predictions. Journal of Behavioral Decision Making, 12: 165–179. doi: 10.1002/(SICI)1099-0771(199906)12:2<165::AID-BDM316>3.0.CO;2-N

Author Information

  1. 1

    Graduate School of Business, University of Chicago, USA

  2. 2

    The Ohio State University, USA

*Graduate School of Business, University of Chicago, 1101 East 58th Street, Chicago, IL 60637, USA.

Publication History

  1. Issue published online: 7 MAY 1999
  2. Article first published online: 7 MAY 1999
  3. Manuscript Accepted: 9 SEP 1998

Funded by

  • National Science Foundation. Grant Number: SBR-9422819

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Keywords:

  • cross-cultural psychology;
  • risk preference;
  • prediction;
  • Chinese;
  • cushion hypothesis

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. Copyright © 1999 John Wiley & Sons, Ltd.

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