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A Cross-Cultural Study of Reference Point Adaptation: Evidence from the China, Korea, and the US Author info | Abstract | Publisher info | Download info | Related research | Statistics Arkes, Hal
Hirshleifer, David
Jiang, Danling
Lim, Sonya
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We examined reference point adaptation following gains or losses in security trading using participants from China, Korea, and the US. In both questionnaire studies and trading experiments with real money incentives, reference point adaptation was larger for Asians than for Americans. Subjects in all countries adapted their reference points more after a gain than after an equal-sized loss. When we introduced a forced sale intervention that highlighted a prior price change, Americans showed greater adaptation toward the new price, whereas Asians showed less adaptation. We offer possible explanations both for the cross-cultural similarities and the cross-cultural differences.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
4009.
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Date of creation: 09 Jul 2007Date of revision:
04 Aug 2008Handle: RePEc:pra:mprapa:4009Contact details of provider: Postal: Schackstr. 4, D-80539 Munich, Germany Phone: +49-(0)89-2180-2219 Fax: +49-(0)89-2180-3900 Web page: http://mpra.ub.uni-muenchen.de More information through EDIRC
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Keywords: Prospect theory ; cross-cultural differences ; reference point adaptation ; mental accounting ; security trading ; Other versions of this item:
Find related papers by JEL classification: G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
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Arkes, Hal & Hirshleifer, David & Jiang, Danling & Lim, Sonya, 2006.
"Reference Point Adaptation: Tests in the Domain of Security Trading ,"
MPRA Paper
4259, University Library of Munich, Germany.
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Other versions:
Arkes, Hal R. & Hirshleifer, David & Jiang, Danling & Lim, Sonya, 2008.
"Reference point adaptation: Tests in the domain of security trading ,"
Organizational Behavior and Human Decision Processes ,
Elsevier, vol. 105(1), pages 67-81, January.
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