Research

Understanding cultural differences in risk perception is critical in an increasingly uncertain world. Here we examine the relationship between the individualism-collectivism continuum and risk perception around the world using a recently available dataset from the Lloyd’s Register Foundation World Risk Poll. The dataset contains rich information of a representative sample of 150,000 participants from 142 countries, and investigates risk perception in terms of perceived likelihood and personal experiences for a range of risks in daily life. We observe that participants from countries with a more individualistic culture perceive lower risk after controlling their personal experiences. We observe similar patterns when we adopt an epidemiological approach to investigate the individualistic cultural influence of first- and second-generation immigrants and use historical kinship tightness to proxy for individualism. Our study sheds light on the importance of culture in shaping risk perception and contributes to understanding global differences in behavioral traits.

While recommendation algorithms are increasingly powerful and prevalent, their influences on individual decision-making remain largely unexplored. To address this question, we conduct a randomized controlled experiment where subjects of a US representative sample make risky decisions. Subjects receive no recommendations in one baseline condition and random recommendations in another baseline condition. In three treatment conditions, subjects receive recommendations based on decisions of the majority, their own past decisions, or decisions of similar subjects. Compared with baseline conditions, subjects tend to follow recommendations and they exhibit less stochastic choices, behave more consistently with expected utility, and make faster decisions. Moreover, subjects are willing to pay to receive recommendations for subsequent decisions. This study helps understand behavioral mechanisms underlying recommendation algorithms and sheds light on the design of choice architecture with the assistance of artificial intelligence.