Arkes, Hal and Hirshleifer, David and Jiang, Danling and Lim, Sonya (2007): A Cross-Cultural Study of Reference Point Adaptation: Evidence from the China, Korea, and the US.
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We examined reference point adaptation following gains or losses in security trading using participants from China, Korea, and the US. In both questionnaire studies and trading experiments with real money incentives, reference point adaptation was larger for Asians than for Americans. Subjects in all countries adapted their reference points more after a gain than after an equal-sized loss. When we introduced a forced sale intervention that highlighted a prior price change, Americans showed greater adaptation toward the new price, whereas Asians showed less adaptation. We offer possible explanations both for the cross-cultural similarities and the cross-cultural differences.
|Item Type:||MPRA Paper|
|Original Title:||A Cross-Cultural Study of Reference Point Adaptation: Evidence from the China, Korea, and the US|
|Keywords:||Prospect theory; cross-cultural differences; reference point adaptation; mental accounting; security trading|
|Subjects:||G - Financial Economics > G1 - General Financial Markets > G11 - Portfolio Choice ; Investment Decisions
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty
|Depositing User:||Danling Jiang|
|Date Deposited:||07. Aug 2008 11:32|
|Last Modified:||14. Feb 2013 07:00|
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Prospect Theory and Reference Point Adaptation: Evidence from the US, China, and Korea. (deposited 24. Jul 2007)
- A Cross-Cultural Study of Reference Point Adaptation: Evidence from the China, Korea, and the US. (deposited 07. Aug 2008 11:32) [Currently Displayed]