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  • Writer's pictureElina Halonen

The reason why we know so little about culture and decision-making

As applied behavioural science grows in popularity around the world, we are at a point where we need to consider how can be applied in different cultural contexts. In this series of blog posts I explore the ways in which factors such as cultural context influence individual decision making and what we know about the human mind is often based on a limited sample of humanity.

This is part 2 of my ‘Globally Irrational, Locally Rational’ article series — find part 1 here!

There is a lot of evidence of the variation in the human experience and that economic, social and linguistic environments strongly shape people’s behaviour, motivations and preferences. Despite this, these topics have not received a lot of attention in decision making psychology. In this article, I shed some light on the background of why this is the case. But before we can talk about the influence of culture on decision-making, we need get on the same page by defining what exactly do we mean when we talk about culture.

What is culture in cultural psychology?

When people talk about culture, they often refer to aspects such as values, social norms, beliefs, and traditions. Surprisingly, despite long-standing debates within academia, there is no single commonly accepted definition of culture. It is a flexible umbrella term that covers, among other things, social behaviour and norms but also things like material artefacts — the exact definition depends on the academic discipline. For example, in management studies it often refers to “corporate culture” and in sociology you might encounter “youth culture” — you can even find a field called Consumer Culture Theory, which has nothing to do with cultural psychology.

Practically speaking, culture is typically defined as a society or country but I prefer to see it as the “shared way in which individuals interpret what goes on around them”[1] — simply because there is often as much variation within the population of a country as there is between them, even though some average tendencies do exist.

For example, we can refer to people having a cultural orientation — a tendency to interpret their environment in a way that is consistent with a specific dimension of culture. These interpretations are rooted in socialisation processes of the cultural context an individual grew up in, and they serve an important evolutionary purpose to promote survival through cooperation. Shared values and beliefs facilitate interaction and cooperation by helping members of the same social system interpret the behaviours of their peers in a similar way.

There are several underlying processes that may result in variation in psychological processes between different cultural contexts.

Firstly, there are differences in socio-ecological and economical environments that influence the structure of a society. For example, from an ecological perspective a warm, sunny climate encourages more socialising outside the home whereas the cold climate of northern Europe discourages spending time outside the home most of the year.

Secondly, societies can have big differences in social norms — partly fostered by the ecological environment but also through ideas prevalent in each society. History and religion play a part in shaping these norms, as do institutional aspects such as legal rights and political climate — as we will see later. It is important to keep in mind, however, that in this introduction we can only scratch the surface of these factors and their impact on behaviour and the nuance is always crucial when it comes to cultural psychology!

Finally, the way we think about ourselves and the ways in that we act are the result of life-long adaptations shaped largely by cultural influences, and reconstructed through continuing experience: different child rearing approaches result in different types of self-perceptions which, in turn, have wide-ranging influences on other areas of behaviour[2]. For example, some cultures engage more in close body contact with small children which you can see in how babies are typically carried in certain African cultures, and in other cultures, particularly Western ones, face-to-face interaction with child-directed language (aka baby talk) is more common. In other words, in Western countries we speak to children in a language that is particularly for them, and spend only minimal time in close body contact with them which influences behaviour in different ways as they grow up.

To sum up, there is a lot of research on culture’s impact on human behaviour in different areas of psychology yet when we look at judgment and decision-making psychology (aka Behavioural Economics) the evidence is much sparser. Let’s take a look at why that is the case.

Grasping in the dark

One key reason for the patchy literature is that much of existing cross-cultural research in judgment and decision making has been driven by atheoretical empiricism — in other words, scattered findings without clear unifying framework even though they exist and have been widely used in social psychology. The heuristics and biases stream of research has also received a lot of attention and the focus has been on discovering so-called “main effects” of one independent variable on the dependent variable. This focus has been sharpened by the academic publication ecosystem which effectively rewards scientists for discovering their own “effect” instead of exploring the nuance such as cross-cultural comparisons.

There is a deeper and more invisible reason as well: the universalist assumption among decision researchers that cognitive process and content are independent of each other[3]. In other words, there is an informal consensus built into the discipline that while beliefs and values may vary between people in different cultural contexts, the underlying cognitive processes are the same. The result of these assumptions is that even the differences that have been observed have often been interpreted as variations in the parameters of a single theory instead of something that should be explained with different theories about underlying decision making in different cultures[4].

This is finally changing, but the progress is slow because cross-cultural research is complex and requires more resources than running laboratory experiments with college students. These practical hurdles can be hugely discouraging for academics whose careers often depend on the volume of publications — something that is easier to produce with within one country.

So, where does this leave us?

Most of the existing cross-cultural research is in specific sub-areas such as overconfidence[5], probability judgment[6] and risk perception[7] (although new research is emerging — covered in future articles). Unfortunately, findings in one area do not necessarily transfer to another or help predict other phenomena, which limits the practical implications of the existing research.

The scattered findings and a lack of unifying theoretical framework make it difficult for practitioners to apply even the limited theory so far — more often than not, this leaves us to proceed with the same implicit, universalist assumption that while cognitive content may vary, cognitive processes are still the same. While we wait for decision science to catch up, one way to understand the impact of cultural context on how behavioural phenomena work might work differently in different countries is to look at some measurable differences between cultures which do affect how a person’s cognition works while they make decisions.


Stay tuned for part 3 where we look at some tools!


[1] Rohner, R. P. (1984). Toward a conception of culture for cross-cultural psychology. Journal of Cross-cultural psychology, 15(2), 111–138.

[2] Kâğıtçıbaşı, Ç. (1996). Family and human development across cultures: A view from the other side. Psychology Press.

[3] Levinson, J. D., & Peng, K. (2007). Valuing cultural differences in behavioral economics. ICFAI journal of behavioral finance, 4, 32–47.

[4] Choi, I., & Nisbett, R. E. (2000). Cultural psychology of surprise: holistic theories and recognition of contradiction. Journal of personality and social psychology, 79(6), 890.

[5] For a review, see Yates, J. F., Lee, J.-W., Sieck, W. R., Choi, I., & Price, P. C. (2002) Probability judgment across cultures. In T. Gilovich, D. Griffin, & D. Kahneman (eds.), Heuristics and Biases: The Psychology of Intuitive Judgment (pp. 271–91). Cambridge: Cambridge University Press.

[6] E.g. Lau, L. Y. & Ranyard, R. (1999) Chinese and English speakers’ linguistic expression of probability and probabilistic thinking, Journal of Cross Cultural Psychology, 30, 411–21. | Wright, G. N., & Phillips, L. D. (1980). Cultural variation in probabilistic thinking: alternative ways of dealing with uncertainty. International Journal of Psychology, 15(1–4), 239–257.

[7] E.g. McDaniels, T. L., & Gregory, R. S. (1991). A framework for structuring cross-cultural research in risk and decision making. Journal of Cross-Cultural Psychology, 22(1), 103–128.| Kleinhesselink, R. R., & Rosa, E. A. (1991). Cognitive representation of risk perceptions a comparison of Japan and the United States. Journal of Cross-Cultural Psychology, 22(1), 11–28. | Hsee, C. K. & Weber, E. U. (1999) Cross-national differences in risk preference and lay predictions, Journal of Behavioral Decision Making, 12, 165–79. | Weber, E. U. & Hsee, C. K. (1999) Models and mosaics: Investigating cross-cultural differences in risk perception and risk preference, Psychonomic Bulletin & Review, 611–17.

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