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

Author

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

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.

Suggested Citation

  • Marshall, Roger & Huan, Tzung-Cheng (T.C.) & Xu, Yingzi & Nam, Inwoo, 2011. "Extending prospect theory cross-culturally by examining switching behavior in consumer and business-to-business contexts," Journal of Business Research, Elsevier, vol. 64(8), pages 871-878, August.
  • Handle: RePEc:eee:jbrese:v:64:y:2011:i:8:p:871-878
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    References listed on IDEAS

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    Cited by:

    1. Tchai Tavor & Sharon Garyn-Tal, 2016. "Further examination of the demographic and social factors affecting risk aversion," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 30(1), pages 95-110, February.
    2. repec:eee:jouret:v:90:y:2014:i:3:p:408-427 is not listed on IDEAS
    3. repec:eee:joreco:v:22:y:2015:i:c:p:24-36 is not listed on IDEAS
    4. repec:eee:ijoais:v:13:y:2012:i:4:p:316-333 is not listed on IDEAS

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