IDEAS home Printed from https://ideas.repec.org/a/eee/joepsy/v49y2015icp47-58.html
   My bibliography  Save this article

Cross cultural differences in decisions from experience: Evidence from Denmark, Israel, and Taiwan

Author

Listed:
  • Di Guida, Sibilla
  • Erev, Ido
  • Marchiori, Davide

Abstract

Three studies are presented that compare decisions from experience in Denmark, Israel, and Taiwan. They focus on two change-related cultural differences suggested by previous research on dialectical vs. analytic approach to thinking. The first implies that East Asians are more likely to change their behavior over time (i.e., are less consistent), the second that they expect more changes in the environment. The results show that the “less consistency in the East” hypothesis has a high predictive value. This hypothesis accurately predicts a behavioral pattern that was documented in all three studies, as well as a non-trivial effect of limited feedback in Study 3: When feedback was limited to the obtained payoff, the participants from Taiwan exhibited less risk aversion than the Israeli. Analysis of the “expecting more changes in the East” hypothesis reveals mixed results. This hypothesis was supported in Study 2, which examined relatively complex multi-alternative multi-outcome tasks, but not in Studies 1 and 3, which examined simple two-alternative two-outcome choice tasks. A possible explanation for the different predictive value of the two examined hypotheses is discussed.

Suggested Citation

  • Di Guida, Sibilla & Erev, Ido & Marchiori, Davide, 2015. "Cross cultural differences in decisions from experience: Evidence from Denmark, Israel, and Taiwan," Journal of Economic Psychology, Elsevier, vol. 49(C), pages 47-58.
    • Handle: RePEc:eee:joepsy:v:49:y:2015:i:c:p:47-58
    DOI: 10.1016/j.joep.2015.04.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167487015000458
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.joep.2015.04.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Yates, J. Frank & Lee, Ju-Whei & Bush, Julie G G., 1997. "General Knowledge Overconfidence: Cross-National Variations, Response Style, and "Reality"," Organizational Behavior and Human Decision Processes, Elsevier, vol. 70(2), pages 87-94, May.
    2. Erev, Ido & Roth, Alvin E, 1998. "Predicting How People Play Games: Reinforcement Learning in Experimental Games with Unique, Mixed Strategy Equilibria," American Economic Review, American Economic Association, vol. 88(4), pages 848-881, September.
    3. Weber, Elke U. & Hsee, Christopher K. & Sokolowska, Joanna, 1998. "What Folklore Tells Us about Risk and Risk Taking: Cross-Cultural Comparisons of American, German, and Chinese Proverbs, , ," Organizational Behavior and Human Decision Processes, Elsevier, vol. 75(2), pages 170-186, August.
    4. Shai Danziger & Liat Hadar & Vicki G. Morwitz, 2014. "Retailer Pricing Strategy and Consumer Choice under Price Uncertainty," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 41(3), pages 761-774.
    5. Colin Camerer & Teck-Hua Ho, 1999. "Experience-weighted Attraction Learning in Normal Form Games," Econometrica, Econometric Society, vol. 67(4), pages 827-874, July.
    6. Jerker Denrell & James G. March, 2001. "Adaptation as Information Restriction: The Hot Stove Effect," Organization Science, INFORMS, vol. 12(5), pages 523-538, October.
    7. Barron, Greg & Ursino, Giovanni, 2013. "Underweighting rare events in experience based decisions: Beyond sample error," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 278-286.
    8. Sharoni Shafir & Taly Reich & Erez Tsur & Ido Erev & Arnon Lotem, 2008. "Perceptual accuracy and conflicting effects of certainty on risk-taking behaviour," Nature, Nature, vol. 453(7197), pages 917-920, June.
    9. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    10. Yates, J. Frank & Lee, Ju-Whei & Shinotsuka, Hiromi & Patalano, Andrea L. & Sieck, Winston R., 1998. "Cross-Cultural Variations in Probability Judgment Accuracy: Beyond General Knowledge Overconfidence?," Organizational Behavior and Human Decision Processes, Elsevier, vol. 74(2), pages 89-117, May.
    11. Erev, I. & Roth, Alvin E., 2014. "Maximization, learning, and economic behavior," Scholarly Articles 30831199, Harvard University Department of Economics.
    12. Joseph Henrich & Steve J. Heine & Ara Norenzayan, 2010. "The Weirdest People in the World?," RatSWD Working Papers 139, German Data Forum (RatSWD).
    13. Di Guida, Sibilla & Marchiori, Davide & Erev, Ido, 2012. "Decisions among defaults and the effect of the option to do nothing," Economics Letters, Elsevier, vol. 117(3), pages 790-793.
    14. Yates, J. Frank & Zhu, Ying & Ronis, David L. & Wang, Deng-Feng & Shinotsuka, Hiromi & Toda, Masanao, 1989. "Probability judgment accuracy: China, Japan, and the United States," Organizational Behavior and Human Decision Processes, Elsevier, vol. 43(2), pages 145-171, April.
    15. Brit Grosskopf & Ido Erev & Eldad Yechiam, 2006. "Foregone with the Wind: Indirect Payoff Information and its Implications for Choice," International Journal of Game Theory, Springer;Game Theory Society, vol. 34(2), pages 285-302, August.
    16. Elke U. Weber & Christopher Hsee, 1998. "Cross-Cultural Differences in Risk Perception, but Cross-Cultural Similarities in Attitudes Towards Perceived Risk," Management Science, INFORMS, vol. 44(9), pages 1205-1217, September.
    17. Wallsten, Thomas S. & Gu, Hongbin, 2003. "Distinguishing choice and subjective probability estimation processes: Implications for theories of judgment and for cross-cultural comparisons," Organizational Behavior and Human Decision Processes, Elsevier, vol. 90(1), pages 111-123, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ayton, Peter & Bernile, Gennaro & Bucciol, Alessandro & Zarri, Luca, 2020. "The impact of life experiences on risk taking," Journal of Economic Psychology, Elsevier, vol. 79(C).
    2. Friedl, Andreas & Pondorfer, Andreas & Schmidt, Ulrich, 2020. "Gender differences in social risk taking," Journal of Economic Psychology, Elsevier, vol. 77(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sibilla Di Guida & Ido Erev & Davide Marchiori, 2014. "Cross Cultural Differences in Decisions from Experience: Evidence from Denmark, Israel and Taiwain," Working Papers ECARES ECARES 2014-16, ULB -- Universite Libre de Bruxelles.
    2. Rieger, Marc O. & Wang, Mei & Phan, Thuy Chung & Gong, Yujing, 2022. "Trend following or reversal: Does culture affect predictions and trading behavior?," Global Finance Journal, Elsevier, vol. 54(C).
    3. Michael Muthukrishna & Joseph Henrich & Wataru Toyokawa & Takeshi Hamamura & Tatsuya Kameda & Steven J Heine, 2018. "Overconfidence is universal? Elicitation of Genuine Overconfidence (EGO) procedure reveals systematic differences across domain, task knowledge, and incentives in four populations," PLOS ONE, Public Library of Science, vol. 13(8), pages 1-30, August.
    4. Greg Barron & Eldad Yechiam, 2009. "The coexistence of overestimation and underweighting of rare events and the contingent recency effect," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 4(6), pages 447-460, October.
    5. Masiliūnas, Aidas, 2023. "Learning in rent-seeking contests with payoff risk and foregone payoff information," Games and Economic Behavior, Elsevier, vol. 140(C), pages 50-72.
    6. Yechiam, Eldad & Busemeyer, Jerome R., 2008. "Evaluating generalizability and parameter consistency in learning models," Games and Economic Behavior, Elsevier, vol. 63(1), pages 370-394, May.
    7. Yates, J. Frank & de Oliveira, Stephanie, 2016. "Culture and decision making," Organizational Behavior and Human Decision Processes, Elsevier, vol. 136(C), pages 106-118.
    8. Einav Hart & Yaakov Kareev & Judith Avrahami, 2012. "Reversal of Risky Choice in a Good versus a Bad World," Discussion Paper Series dp619, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
    9. Arkes, Hal & Hirshleifer, David & Jiang, Danling & Lim, Sonya, 2007. "Prospect Theory and Reference Point Adaptation: Evidence from the US, China, and Korea," MPRA Paper 4009, University Library of Munich, Germany.
    10. repec:cup:judgdm:v:4:y:2009:i:6:p:447-460 is not listed on IDEAS
    11. Illiashenko, Pavlo & Laidroo, Laivi, 2020. "National culture and bank risk-taking: Contradictory case of individualism," Research in International Business and Finance, Elsevier, vol. 51(C).
    12. Alina Ferecatu & Arnaud De Bruyn, 2022. "Understanding Managers’ Trade-Offs Between Exploration and Exploitation," Marketing Science, INFORMS, vol. 41(1), pages 139-165, January.
    13. Erhao Xie, 2019. "Monetary Payoff and Utility Function in Adaptive Learning Models," Staff Working Papers 19-50, Bank of Canada.
    14. Francisco Gomes & Michael Haliassos & Tarun Ramadorai, 2021. "Household Finance," Journal of Economic Literature, American Economic Association, vol. 59(3), pages 919-1000, September.
    15. Xie, Erhao, 2021. "Empirical properties and identification of adaptive learning models in behavioral game theory," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 798-821.
    16. Sandro Casal & Nives DellaValle & Luigi Mittone & Ivan Soraperra, 2017. "Feedback and efficient behavior," PLOS ONE, Public Library of Science, vol. 12(4), pages 1-21, April.
    17. Gijs Kuilen & Peter Wakker, 2006. "Learning in the Allais paradox," Journal of Risk and Uncertainty, Springer, vol. 33(3), pages 155-164, December.
    18. Funai, Naoki, 2022. "Reinforcement learning with foregone payoff information in normal form games," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 638-660.
    19. Wen‐Qiang Bian & L. Robin Keller, 1999. "Chinese and Americans Agree on What Is Fair, but Disagree on What Is Best in Societal Decisions Affecting Health and Safety Risks," Risk Analysis, John Wiley & Sons, vol. 19(3), pages 439-452, June.
    20. Bogliacino, Francesco & Codagnone, Cristiano, 2021. "Microfoundations, behaviour, and evolution: Evidence from experiments," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 372-385.
    21. Dennis A. V. Dittrich & Werner Güth & Martin G. Kocher & Paul Pezanis‐Christou, 2012. "Loss Aversion and Learning to Bid," Economica, London School of Economics and Political Science, vol. 79(314), pages 226-257, April.

    More about this item

    Keywords

    The hot stove effect; Underweighting of rare events; Decisions from experience; Clicking paradigm; Recency effect; Dialectical thinking;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joepsy:v:49:y:2015:i:c:p:47-58. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/joep .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.