Prospect Theory Around the World

Rieger, Marc Oliver; Wang, Mei; Hens, Thorsten

doi:10.2139/ssrn.1957606

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Prospect Theory Around the World

NHH Dept. of Finance & Management Science Discussion Paper No. 2011/19

37 Pages Posted: 10 Nov 2011

See all articles by Marc Oliver Rieger

Mei Wang

WHU - Otto Beisheim School of Management

Thorsten Hens

University of Zurich - Department of Banking and Finance; Norwegian School of Economics and Business Administration (NHH); Swiss Finance Institute

Date Written: October 31, 2011

Abstract

We present results from the first large-scale international survey on risk preferences, conducted in 45 countries. We show substantial cross-country differences in risk aversion, loss aversion and probability weighting. Moreover, risk attitudes in our sample depend not only on economic conditions, but also on cultural factors, as measured by the Hofstede dimensions Individuality and Uncertainty Avoidance. The presented data might also serve as an interesting starting point for further research in cultural economics.

Keywords: Risk preferences, prospect theory, cross-cultural comparison

JEL Classification: D90, F40

Suggested Citation: Suggested Citation

Rieger, Marc Oliver and Wang, Mei and Hens, Thorsten, Prospect Theory Around the World (October 31, 2011). NHH Dept. of Finance & Management Science Discussion Paper No. 2011/19, Available at SSRN: https://ssrn.com/abstract=1957606 or http://dx.doi.org/10.2139/ssrn.1957606