In Wrong Anticipation - Miscalibrated Beliefs between Germans, Israelis, and Palestinians.
The reconcilability of actions and beliefs in inter-country relationships, either in business or politics, is of vital importance as incorrect beliefs on foreigners' behavior can have serious implications. We study a typical inter-country interaction by means of a controlled laboratory investment game experiment in Germany, Israel and Palestine involving 400 student participants in total. An investor has to take a risky decision in a foreign country that involves transferring money to an investee/allocator. We found a notable constellation of calibrated and un-calibrated beliefs. Within each country, transfer standards exist, which investees correctly anticipate within their country. However, across countries these standards differ. By attributing the standard of their own environment to the other countries investees are remarkably bad in predicting foreign investors' behavior. The tendency to ignore this potential difference can be a source of misinterpreting motives in cross-country interaction. Foreigners might perceive behavior as unfavorable or favorable differentiation, even though-unknown to them-investors actually treat fellow-country people and foreigners alike.
Department of Economics, Florida State University, Tallahassee, Florida, United States of America.|Max Planck Institute for Research on Collective Goods, Bonn, Germany.
Sebastian J
SJ
Goerg
Laboratory for Experimental Economics, University of Bonn, Bonn, Germany.|Department of Health Management and Health Economics, University of Oslo, Oslo, Norway.
Heike
H
Hennig-Schmidt
Corporate Development and Business Ethics, University of Cologne, Cologne, Germany.
Gari
G
Walkowitz
The Center for the Study of Rationality, The Hebrew University of Jerusalem, Jerusalem, Israel.
Eyal
E
Winter
D018912:Arabs; D003710:Demography; D004641:Emigration and Immigration / Q000639:trends*; D005260:Female; D005858:Germany; D006801:Humans; D007557:Israel; D008297:Male; D008877:Middle East; D011057:Politics; D011157:Population Dynamics; D014171:Transients and Migrants