Academic journal article The Psychological Record

Cross-Cultural Comparisons of Discounting Delayed and Probabilistic Rewards

Academic journal article The Psychological Record

Cross-Cultural Comparisons of Discounting Delayed and Probabilistic Rewards

Article excerpt

The major goal of the present study was to assess the cross-cultural generality of monetary decision-making processes by comparing the discounting of delayed and probabilistic rewards by groups of participants raised in quite different cultures (i.e., Americans, Chinese, and Japanese). The term discounting refers to the decrease in subjective value of a reward as its uncertainty increases or as the delay until its receipt increases. For example, the subjective value of a 1-in-a-100 chance of receiving $1,000 is less than the subjective value of a 1-in-10 chance of receiving the $1,000; similarly, the present, subjective value of receiving $1,000 in 1 year is less than the subjective value of receiving it in 1 month. The concept of discounting plays an important role in self control and impulsivity and is crucial in accounting for decision making that involves temporal and risk factors typical of many everyday choice situations (e.g., financial investments and health-related life-style choices) (e.g., Ainslie, 1992; Green & Myerson, 1993; Heyman, 1996; Loewenstein & Elster, 1992; Prelec & Loewenstein, 1991; Rachlin, 1990, 1995).

Cultures may differ in their attitudes toward risk or in their perception of risk (Weber & Hsee, 1998), and these differences could lead to differences in probability discounting. Similarly, cultures may differ in their attitudes toward time or in their perception of time (Gell, 1992; Helfrich, 1996), and such differences could lead to differences in temporal discounting. In both cases (i.e., temporal and probability discounting), one might observe qualitative differences in discounting, as indicated by differences in the form of the discounting function (i.e., the mathematical function relating subjective value to delay or odds). In contrast, one might observe quantitative differences, as indicated by differences in how steeply delayed or probabilistic rewards are discounted.

Despite the potential importance of cultural similarities and differences in discounting, the topic of culture and decision making has received little attention from researchers in the areas of either judgment and decision making or cross-cultural psychology (for a review, see Weber & Hsee, 2000). This relative lack of cross-cultural research on decision making is particularly notable with respect to delayed outcomes, especially when contrasted with the amount of research on choice involving risky outcomes (e.g., Hsee & Weber, 1999; Weber & Hsee, 1998). The one cross-cultural study that involved discounting delayed outcomes reported no differences in temporal discounting rates between Canadian undergraduates and foreign undergraduates of Chinese descent (Tan & Johnson, 1996). This result is intriguing given the often-noted differences between social and cultural groups in attitudes about and conceptions of time (e.g., Gell, 1992).

With respect to risky outcomes, Weber and Hsee have repeatedly reported cultural differences. Specifically, they find that Chinese are less risk-averse than Americans with respect to financial decisions (Hsee & Weber, 1999; Weber & Hsee, 1998). They explain their findings in terms of the "cushion" that a collectivist society like that of the People's Republic of China provides for an individual's financial losses. Consistent with the cushion hypothesis, Chinese individuals perceive financial options as less risky than Americans (Weber & Hsee, 1998), and differences in risk-aversion between Chinese and Americans are confined to financial decisions and are not present in other decision domains (Hsee & Weber, 1999).

It has been frequently hypothesized that Japan, like China, is a collectivist society (e.g., Hofstede, 1980; Markus & Kitayama, 1991), thereby leading to the prediction that Chinese and Japanese should show similar decision making involving risks and should differ from those from individualistic cultures like the United States. …

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