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What Folklore Tells Us about Risk and Risk Taking: Cross-Cultural Comparisons of American, German, and Chinese
Weber1, Hsee, Sokolowska
1Departments of Psychology and Management and Human Resources, The Ohio State University
Organizational Behavior and Human Decision Processes
|December 16, 1998
Summary
Cultural factors, not economics, explain why Chinese from the People's Republic of China (PRC) are more risk-seeking than Americans. Proverbs reveal differing cultural attitudes toward financial and social risk-taking.
Area of Science:
- Cross-cultural psychology
- Behavioral economics
- Sociolinguistics
Background:
- Recent findings indicate Chinese from the People's Republic of China (PRC) exhibit higher risk-seeking behavior compared to Americans.
- Existing explanations often focus on situational-economic factors versus cultural influences.
Purpose of the Study:
- To investigate whether cultural or situational-economic factors explain the observed differences in risk-seeking behavior between Chinese and Americans.
- To analyze national differences in risk perception and advice embedded within cultural proverbs.
Main Methods:
- Two studies were conducted, comparing American and Chinese proverbs related to risk.
- A third country, Germany, was included as a control group due to its socioeconomic similarity to the US and cultural collectivism alignment with the PRC.
- Participants from each culture rated proverbs on implied advice (risk-seeking vs. risk-avoiding) and applicability to financial versus social risks.
Main Results:
- Chinese and German proverbs were perceived as advocating more risk-seeking advice than American proverbs.
- American proverbs were deemed less applicable to social risks compared to Chinese and German proverbs.
- Chinese participants perceived proverbs (regardless of origin) as advocating greater risk-seeking, specifically for financial risks, more so than American participants.
Conclusions:
- The findings support a cultural explanation for national differences in risk-seeking behavior.
- Cultural values and norms, as reflected in proverbs, significantly influence perceptions and attitudes towards financial and social risks.
- Differences in risk-taking are not solely attributable to economic situations but are deeply rooted in cultural orientations.
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