Cross-Cultural Risk Behavior in Financial Decisions and the Cushion Hypothesis

92 students from a Southern California liberal arts college and two Beijing universities participated in an online questionnaire. Their cultural tendencies (i.e. level of collectivism and perception of family support) and responses to hypothetical investment scenarios were observed. Participants were asked to provide the amount they would invest in each scenario as well as a risk safety rating. The Chinese respondents reported higher cushion and collectivism scores than the Americans. Furthermore, the Chinese sample offered more money for the three riskiest scenarios; they also rated three scenarios safer than the Americans did. The cushion and collectivism scores were not found to predict risk appraisal and amount invested in the scenarios. The results suggest that cultural biases may have an impact on the financial risk-taking behavior of different peoples, but other cultural variables and situational determinants may play an equally influential role in affecting risk perception and investment behavior