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

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  • 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
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    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

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