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Financial decision making in collective society--A field test on Israeli kibbutz members and city residents

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  • Rosenboim, Mosi
  • Shavit, Tal
  • Shoham, Amir

Abstract

This comparison of Israeli kibbutz members to city residents examines how of individualistic/collective society affects financial decision making. Findings revealed that kibbutz members are more risk averse and discount the future more than city residents, undermining the assumption that collective society accords a safety net. We claim that the collective financial management of the kibbutz reduces individuals' financial knowledge and experience, causing them to be more risk averse in financial decisions, and thus overpowering the safety net offered by the collective society. In addition, we argue that despite privatization, individuals still operate according to collective ideas in handling their personal finances, but less than before the onset of the privatization process.

Suggested Citation

  • Rosenboim, Mosi & Shavit, Tal & Shoham, Amir, 2010. "Financial decision making in collective society--A field test on Israeli kibbutz members and city residents," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(1), pages 30-36, January.
  • Handle: RePEc:eee:soceco:v:39:y:2010:i:1:p:30-36
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    Citations

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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. Shoham, Amir & Malul, Miki, 2013. "Cultural attributes, national saving and economic outcomes," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 47(C), pages 180-184.
    3. Alex Krumer & Tal Shavit & Mosi Rosenboim, 2011. "Why do professional athletes have different time preferences than non-athletes?," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 6(6), pages 542-551, August.
    4. Pikulina, E.S., 2014. "Incentives, behavioral biases, and risk taking," Other publications TiSEM 3473e2b3-2425-449c-95e2-4, Tilburg University, School of Economics and Management.
    5. Shavit, Tal & Lahav, Eyal & Benzion, Uri, 2013. "Factors affecting soldiers’ time preference: A field study in Israel," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 44(C), pages 75-84.
    6. Lahav, Eyal & Benzion, Uri & Shavit, Tal, 2010. "Subjective time discount rates among teenagers and adults: Evidence from Israel," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(4), pages 458-465, August.
    7. Israel, Avi & Rosenboim, Mosi & Shavit, Tal, 2014. "Using priming manipulations to affect time preferences and risk aversion: An experimental study," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 53(C), pages 36-43.

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