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Michael R. Powers

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Does Conformity Imply Risk Aversion?

Posted: 06/21/2012 1:22 pm

A recent poll in the Shanghai Daily asked readers "Why do you think foreigners seem more ready to help during an emergency?" The question was prompted by an event in which an Italian professor at Shanghai Tongji University pitched in to help passengers off a burning bus while others simply watched. The possible answers offered by the newspaper, and their respective (non-scientific) response rates, were as follows:

1. "The Chinese are selfish and indifferent." 56%
2. "Most Chinese lack first-aid skills." 12%
3. "Foreigners have no idea that they might be implicated for offering help." 23%
4. "I have nothing to say." 9%

Of course, the above poll was not only non-scientific, but tendentious. Not so subtly chastising the Chinese public by highlighting the "selfish and indifferent" explanation, it also failed to ignore several other clear possibilities:

5. "Foreigners want to be helpful guests while living in China."
6. "Chinese are less willing to take risks."
7. "The premise is incorrect: Foreigners are not more willing to help."

As a foreign professor living in China, I fortunately have not been called upon to rush into a burning bus or demonstrate other personal heroics. Nevertheless, from the guest-like behavior of most of my foreign colleagues, I suspect that number (5) may provide the best answer, assuming (7) is not in fact true. The possibility that intrigues me most, however, is number (6) -- that Chinese and foreigners simply manifest different attitudes toward risky behaviors. This explanation is interesting because there are two obvious reasons for Chinese taking fewer risks -- risk aversion and social conformity -- but the logical relationship between them is somewhat unclear.

By risk aversion, I refer to the behavior of decision makers who prefer actions with more predictable outcomes to those with less predictable outcomes, even if the former are less beneficial on the average. By social conformity, I mean the unwillingness of decision makers to deviate from prevailing social norms, regardless of the underlying cause (peer pressure, moral philosophy, religious beliefs, etc.). It seems fairly evident that risk aversion implies conformity because a society whose members are risk averse would tend to be characterized by a narrow band of actions resulting in predictable outcomes; but is the converse also true?

It is generally acknowledged that Chinese culture imposes a fair degree of conformity. This is frequently expressed through aphorisms such as "The bird that sticks its head out gets shot" or "The nail that sticks up gets hammered down." However, is it reasonable to believe that an adherence to social norms necessarily engenders a cultural tendency to eschew risk?

One certainly can imagine social norms that encourage everyone to be risk averse; but one equally can imagine norms that encourage everyone to be risk prone (e.g., the school-yard "I dare you" culture often promoted by "reality" television and social media in the United States). In either case, such a cultural force might be called ex ante conformity to emphasize that it is initial actions, rather than subsequent outcomes, that must adhere to convention. Thus, ex ante conformity cannot be said to imply risk aversion.

On the other hand, the type of conformity that exists in China is rather different, requiring not only the avoidance of undesirable actions (absenteeism, drug use, promiscuity, etc.), but also the undesirable outcomes of such actions (unemployment, crime, sexually transmitted disease, etc.). Consequently, Chinese culture might be said to impose ex post conformity, which then implies a narrow band of actions resulting in predictable outcomes -- in other words, risk aversion.

In sum, risk aversion and social conformity per se are not equivalent cultural characteristics, but risk aversion and ex post social conformity are. Although somewhat doubtful of the premise of the Shanghai Daily's poll (i.e., that foreigners are more ready to help during an emergency), I am fairly confident that the Chinese characteristic of ex post conformity does imply a greater-than-average degree of risk-averse behavior.