CROSS-CULTURAL DIFFERENCES IN RISK PERCEPTION BUT CROSS-CULTURAL SIMILARITIES IN ATTITUDES TOWARDS PERCEIVED RISK

In this study, respondents from the P.R.C., U.S.A., Germany, and Polan d were found to differ in risk preference, as measured by buying price s for risky financial options. Chinese respondents were significantly less risk-averse in their pricing than Americans when risk preference was assessed in the traditional expected-utility framework. However, t hese apparent differences in risk preference were associated primarily with cultural differences in the perception of the risk of the financ ial options rather than with cultural differences in attitude towards perceived risk. In all cultures, an equal proportion (the majority) of respondents was willing to pay more for options perceived as less ris ky, i.e., were perceived-risk averse. These results are most naturally explained within a risk-return conceptualization of risky choice, The y have practical implications for cross-cultural negotiation and comme rce by suggesting the locus of cultural differences in risky choice th at may allow for the creation of joint gains.