Extending prospect theory cross-culturally by examining switching behavior in consumer and business-to-business contexts

Roger Marshall, Huan, Tzung-Cheng (T.C.), Yingzi Xu and Inwoo Nam

Journal of Business Research, 2011, vol. 64, issue 8, 871-878

Abstract: Prospect theory states that an individual in a loss situation is more likely to make a risky financial decision than when they are in a gain frame. Some researchers observe that Asians tend to have a more positive attitude toward risk in financial decisions than Westerners. The first of two studies tests these two phenomena. The study finds Singaporeans and Chinese to be less risk averse than Dutch and New Zealand people over both a gain and a loss frame when making a personal financial decision. A second study extends this finding to individuals in a business relationship switching suppliers, and finds that when switching is framed as a risky decision the same pattern of behavior occurs. New Zealand and American consumers are more risk averse than those from Japan and Singapore, who are more likely to change suppliers under both a gain and a loss frame.

Keywords: Prospect; theory; Risky; decisions; Switching; costs; Cross-cultural (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:64:y:2011:i:8:p:871-878

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