Cross-Cultural Differences in Risk Perception, but Cross-Cultural Similarities in Attitudes Towards Perceived Risk

Elke U. Weber and Christopher Hsee
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Elke U. Weber: Department of Psychology and Department of Management and Human Resources, The Ohio State University, 1885 Neil Avenue, Columbus, Ohio 43210
Christopher Hsee: Graduate School of Business, University of Chicago, 1101 East 58th Street, Chicago, Illinois 60615

Management Science, 1998, vol. 44, issue 9, 1205-1217

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.

Keywords: Risk; Risk Perception; Risk Preference; Risk Attitude; Risky Choice (search for similar items in EconPapers)
Date: 1998
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Citations: View citations in EconPapers (196)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:44:y:1998:i:9:p:1205-1217

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