Cultural Heterogeneity and Economic Power Asymmetry in Resource Dilemmas: Implications for Self-Interested Behavior in Negotiations

Abstract

This study adopted a contextual framework to examine whether an interaction between group culture and economic power influences self-interest in a simulated commons dilemma. Full-time managers enrolled in executive MBA programs in Germany, Hong Kong, Israel, and the United States (U.S.) made decisions in an asymmetric commons dilemma. Relative to managers from the U.S. and Germany, Israeli managers were more likely to follow an individually rational decision-making approach, taking more resources in a high versus low economic power condition. In contrast, managers from Hong Kong in a high economic power condition followed a collectively rational approach, voluntarily taking fewer resources. Egocentrism mediated this interaction effect of group culture and economic power for the Israeli managers who were more egocentric and believed it was fair to harvest more resources in a high power condition. However, egocentrism did not mediate the interaction effect for managers from Hong Kong. The theoretical and practical implications of the findings highlight the importance of studying the proximal effect of group culture on contextual factors, such as economic power asymmetry, that influence cooperation in social dilemmas.