Cultural variations in decision-making: A study of Investment decisions and attributions among Indian and French

Abstract

While significant cognitive differences exist among different cultures, this fact has been largelyignored in traditional behavioural economic research. This shortcoming manifests itself as a tensionduring cross cultural communication, and can have a wide ranging impact especially on businessesthat span several geographies. It is important for global managers to be aware and act on bridgingthis gap, to ensure a productive, motivated and coherent workforce. In this two part study, weexplore some of these differences between Indian and French nationals.The first study involves 4 hypotheses that study the differences on how the Indian and Frenchgroups take major personal financial decisions.The second part of the study involves 4 hypotheses that study the two groups on a well-studied biascall the Fundamental Attribution Error.In both studies, we found that there were hypotheses that were rejected, and this lent credibility toour initial thoughts about the differences between the groups. For example, we found that Indiansand French aspire to save very different fractions of their incomes, which we believe is a majorfinding which could impact financial services industries in the two countries. We also found thatIndians exhibit the ‘Ripple Effect’ in Attribution Style which means that Indians think that it takesmuch longer to recover from the effects of a financial disaster than the French group.