Decision-making In Different Cultures: Essays In Experimental Economics

People interact with each other rationally and irrationally. Standard economic theories assume that people act rationally, yet, behavioral economic theories indicate that sometimes people act irrationally because of the specific situation, their character, and many other factors. Culture plays a role in shaping people’s preferences, values, personalities, norms, and beliefs. That being the case, it is important to shed some light on the effect of different types of cultures on people’s decision-making behavior, in order to better understand human nature with regard to economic decisions. The ultimate goal of this thesis is to define how people from various cultures behave differently while making economic decisions, and to provide a better understanding for the motives behind people’s preferences towards decision-making. The first and second chapters of this thesis consider studies in experimental economics about the effect of introducing effort to the ultimatum game. The first chapter provides evidence that people’s decisions are driven by either hierarchy or property rights by comparing the results of three different cultures. The second chapter shows the impact of proposers’ effort in the ultimatum game, in which, culturally driven phenomenon impact on the proposers’ behavior. The third chapter investigates the impact of the Islam religion on experimental studies with regard to decision making and it shows that religious beliefs play an important role in shaping people’s preferences.