The Influence of Culture on the Lure of Choice, Mental Accounting, and Overconfidence

Sebastian Hoffmann; Sajid Anwar

doi:10.3390/bs14030156

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The Influence of Culture on the Lure of Choice, Mental Accounting, and Overconfidence

Journal article

Open access

Peer reviewed

The Influence of Culture on the Lure of Choice, Mental Accounting, and Overconfidence

Sebastian Hoffmann and Sajid Anwar

Behavioral Sciences, Vol.14(3), pp.1-15

2024

DOI: https://doi.org/10.3390/bs14030156

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Abstract

behavioural economics

behavioural finance

decision making

culture

lure of choice

mental accounting

overconfidence

In the contemporary globalized landscape characterized by international and intercultural decision-making processes, interconnected supply chains, and diverse customer relations, susceptibility to biases and heuristics poses a substantial threat to the efficiency of decision making. This research explores the relatively understudied influence of culture on individuals’ susceptibility to concepts derived from behavioral economics. Employing the Individual Cultural Values Scale (CVSCALE), we examine the impact of culture on the allure of choice, mental accounting, and overconfidence among 837 participants from Australia (AU), China (CN), Germany (GE), and the United States (US) through logistic regression analysis. At the individual level, discernible interactions between power–distance, allure of choice, and overconfidence are observed. On the national scale, power–distance (AU, US), uncertainty avoidance (US), and masculinity (CN) significantly impact the allure of choice, while overconfidence is influenced by power–distance (US) and masculinity (US). Our analysis shows that culture plays a pivotal role in shaping susceptibility to biases and heuristics, thereby influencing decision-making processes. The findings advocate for a culturally differentiated approach to behavioral economics, emphasizing the need to tailor strategies and interventions based on cultural nuances.

Details

Title: The Influence of Culture on the Lure of Choice, Mental Accounting, and Overconfidence
Authors: Sebastian Hoffmann (Author) - University of the Sunshine Coast, Queensland, School of Business and Creative Industries
Sajid Anwar (Corresponding Author) - University of the Sunshine Coast, Queensland, School of Business and Creative Industries
Publication details: Behavioral Sciences, Vol.14(3), pp.1-15
Publisher: MDPI AG
Date published: 2024
DOI: 10.3390/bs14030156
ISSN: 2076-328X
Copyright note: © 2024 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/licenses/by/4.0/).
Data Availability: Data were obtained from consenting participants. As per the Research Project Information Sheet (RPIS) participants provided informed consent to the use of their data only by the specified research team.
Organisation Unit: School of Business and Creative Industries; Indigenous and Transcultural Research Centre
Language: English
Record Identifier: 991008298002621
Output Type: Journal article

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