Culture and Risk-Sharing Networks

Abstract

I investigate how students from different cultures form risk-sharing networks when they come to study at university, and how these network structures affect risk attitudes in different contexts. Using an online survey, I find that students from collectivist cultures such as China form larger financial risk-sharing networks at university than students from individualist cultures such as Britain. In the financial context, having a larger network increases the willingness to take risks for collectivists but not individualists. On the other hand, students from collectivist cultures are less willing to take risks with their interpersonal relationships than those from individualist cultures. One likely reason for this is that as networks are relied on more for risk-sharing in collectivist cultures, the value of maintaining relationships is increased. This paper adds to the literature on cultural differences in risk attitudes, by focusing on social networks, which differ culturally and affect risk attitudes.