Cultural context and cross-country behavioral differences in group decision-making

Abstract

This study tests the influence of culture on group decision-making behavior among respondents in Korea and Germany. For our field experiment we are using an ultimatum game design, played among participants in Korea and in a benchmark experiment in Germany. We find evidence that taking the mosaic view of culture and making subjects aware of shared affective ties, based on age, educational-institution and regional origin, leads to differences in economic decisions, contrary to what neoclassical economic theory would suggest. Our results indicate that awareness of common group membership in some cultural contexts orients decision-makers toward upholding social norms that induces a greater preference for more selfless, in-group interested decisions, while anonymity makes personal identity salient and promotes more self-interested economic decisions. These effects are more pronounced in Korean participants compared with German participants.

Keywords:

• Culture
• decision-making
• field experiment
• Germany
• group identity
• Korea
• social identity theory

Acknowledgements

We are thankful for the valuable comments and suggestions of session participants at the Academy of International Business (AIB) 2017 meeting in Dubai where an earlier version of this manuscript was presented.

Notes

1 In the business literature a student subject is at times discussed critically in relation to external validity concerns. However, depending on the nature of the research questions, students can be regarded suitable when questions are explored that do not exactly research a particular business context (Bello et al. 2009). When it comes to studying for instance social preferences in an experimental setting, research has found that differences in decision making behavior between students, non-students and more senior respondents are insignificant (e.g. Falk, Meier, and Zehnder 2013; Güth, Schmidt, and Sutter 2007). Using an ultimatum game played with newspaper readers, Güth, Schmidt, and Sutter (2007) compared decision-making behavior across different demographics and concluded that “decisions made by students in the lab are rather similar to those made by participants in the newspaper experiment, indicating a high degree of external validity of student data” (2007, 449).

Additional information

Notes on contributors

Sven Horak

Sven Horak is an associate professor of management at The Peter J. Tobin College of Business, St. John’s University in New York. His research interests include the influence of informal ties, practices and networks in management in an international context, organizational agility and global leadership.

Bindu Arya

Bindu Arya is the Management Department Chair in the College of Business Administration at the University of Missouri-St. Louis. Her research focuses on enterprise strategy, transformation and collaboration networks. She has a special interest in studying the impact of CSR on organizational and employee outcomes in emerging markets.