Culture and Decision Making: Avoiding Mirroring

Tyler Cowen (from Marginal Revolution) presents an excerpt for this interesting paper:

Results of the experiment demonstrated dramatic cultural differences in financial value estimations, as well as on the influence of variables such as framing effects. Chinese participants made higher object value estimates than Americans did, even when adjusting for differing national inflation rates. In addition, the results showed that contextual information, such as framing, morality information, and group membership affected judgments of financial values in complex ways, particularly for Chinese participants. The results underscore the importance of understanding the influence of cultural background on economic decision-making. The authors discuss the results in the context of behavioral law and economics, and propose that importing cultural competence into behavioral models can lead to cognitive debiasing, both temporary and permanent.

Realism, Decision Making and Culture
One of the fundamental flaws of the school of realism is the belief that all actors are self-interested rational actors. We can assume that all actors are rational, yet we need to recognize that different value systems (as influenced by one’s culture and enviorment) can bring about very logical, but very different decisions.

From my own personal college experience in International Relations courses, I never once remembered a serious considering on how cultural values shaped decision-making, policy objectives and grand strategy objectives. Yet despite all this, we know there’s a difference. There are business consultants who consult on the different business styles of Americans, Indonesians, the French, Russians and others.

While I am sure those inside the walls of the State Dept., DoD and other policy-making and shaping groups know this, there should be a more frank open discussion by the mainstream media, which too are policy-shappers in the area of public opinion.

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Daniel writes on foresight and explores new economic systems. He has over 15 years of experience in technology & digital marketing and has worked with clients in Europe, Asia, and the United States. Daniel is currently part of the University of Houston's Foresight Program.