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Toward an understanding of the influence of cultural background and domain experience on the effects of risk-pricing formats on risk perception

Toward an understanding of the influence of cultural background and domain experience on the effects of risk-pricing formats on risk perception
Toward an understanding of the influence of cultural background and domain experience on the effects of risk-pricing formats on risk perception
Risk information framing can be a powerful tool for aiding the communication of risk and improving decision-making. However, little work has investigated the extent that these framing effects depend on the characteristics of the perceiver. In our study, we examine whether the effects of different risk-pricing formats on risky choices are the same for all individuals, no matter their domain experience or cultural background, or whether there are interactions between these factors. Survey 1 revealed that three risk-pricing formats of the same choice problem resulted in the same individuals making different risky choices (preference reversal); suggesting that risk-perception was distorted by the risk-pricing format manipulation. In Survey 2, the effects of the risk-pricing formats were shown to differ by the participants’ cultural background (Asian vs. European) and the extent of their domain experience. The fact that there were no differences between the cultural or domain experience groups in their overall tendency to select riskier (cf. safer) choices indicates that risk behavior differences between groups are often closely linked to perceptual, rather than simply attitudinal, cognitive processes. The results demonstrate the complex, interactive cognitive processes that are used to encode risk information, involving the framing of the information and the cultural background and previous experiences of the individual. We conclude that it is important to consider the characteristics of the individual (e.g., culture, domain experience, etc.) when manipulating risk-information framing with the aim of improving their risk communication.
0272-4332
1846-1869
Fraser-Mackenzie, Peter
0582f787-6e98-45ec-aeb5-4e563f3f39c5
Sung, M.
2114f823-bc7f-4306-a775-67aee413aa03
Johnson, J.E.V.
6d9f1a51-38a8-4011-a792-bfc82040fac4
Fraser-Mackenzie, Peter
0582f787-6e98-45ec-aeb5-4e563f3f39c5
Sung, M.
2114f823-bc7f-4306-a775-67aee413aa03
Johnson, J.E.V.
6d9f1a51-38a8-4011-a792-bfc82040fac4

Fraser-Mackenzie, Peter, Sung, M. and Johnson, J.E.V. (2014) Toward an understanding of the influence of cultural background and domain experience on the effects of risk-pricing formats on risk perception. Risk Analysis, 34 (10), 1846-1869. (doi:10.1111/risa.12210).

Record type: Article

Abstract

Risk information framing can be a powerful tool for aiding the communication of risk and improving decision-making. However, little work has investigated the extent that these framing effects depend on the characteristics of the perceiver. In our study, we examine whether the effects of different risk-pricing formats on risky choices are the same for all individuals, no matter their domain experience or cultural background, or whether there are interactions between these factors. Survey 1 revealed that three risk-pricing formats of the same choice problem resulted in the same individuals making different risky choices (preference reversal); suggesting that risk-perception was distorted by the risk-pricing format manipulation. In Survey 2, the effects of the risk-pricing formats were shown to differ by the participants’ cultural background (Asian vs. European) and the extent of their domain experience. The fact that there were no differences between the cultural or domain experience groups in their overall tendency to select riskier (cf. safer) choices indicates that risk behavior differences between groups are often closely linked to perceptual, rather than simply attitudinal, cognitive processes. The results demonstrate the complex, interactive cognitive processes that are used to encode risk information, involving the framing of the information and the cultural background and previous experiences of the individual. We conclude that it is important to consider the characteristics of the individual (e.g., culture, domain experience, etc.) when manipulating risk-information framing with the aim of improving their risk communication.

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More information

Accepted/In Press date: 10 March 2014
e-pub ahead of print date: 28 April 2014
Published date: 2014
Organisations: Centre of Excellence for International Banking, Finance & Accounting

Identifiers

Local EPrints ID: 364310
URI: http://eprints.soton.ac.uk/id/eprint/364310
ISSN: 0272-4332
PURE UUID: 9539e41f-5fa0-4ae6-90c7-f89fad38f33b
ORCID for M. Sung: ORCID iD orcid.org/0000-0002-2278-6185

Catalogue record

Date deposited: 23 Apr 2014 14:13
Last modified: 13 Nov 2021 02:43

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Contributors

Author: Peter Fraser-Mackenzie
Author: M. Sung ORCID iD
Author: J.E.V. Johnson

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