How do risk and time preferences develop across cultures?

Dating back to the Marshmallow Task of the 1970s, psychologists have long been interested in the development of patience and impulsivity among children. However, the vast majority of work on this topic has been conducted entirely among Western children, who live in very different environments than most other children in the world. In this study, we wanted to investigate how time preferences — how much you value the present over the future — and risk preferences — how much you value guaranteed rewards over riskier ones — develop across different environments. To explore this question, we created two novel games for children to play. In the time task, children are offered choices between candy they can eat today versus candy they have to wait for tomorrow to eat. In the risk task, children are offered the choice between a guaranteed reward and one that is less likely but generally greater in value.

In order to understand how different environments may lead to different preferences, we conducted this study among American children in New Haven, Toba children in Argentina, Indian schoolchildren in Gujarat,  and indigenous Shuar children in Amazonian Ecuador.

We find that across all four countries, children are sensitive to reward outcome, generally preferring the tomorrow reward or risky reward as the reward amount increases. However, we also find interesting cross-cultural differences.

When it comes to risk preferences, children in India, the US, and Argentina tend to prefer the risky options, while Shuar children overwhelmingly prefer the safe options. Risk preferences also show an interesting developmental pattern, with India, American, and Argentinian children starting out risk-seeking and eventually becoming more risk-averse, while Shuar children start out risk-averse and generally become more risk-seeking.

We see an interesting pattern in time preferences as well.  We find that all children become more patient with age. However, we again see a pattern such that children from India, the US, and Argentina group together, generally preferring tomorrow rewards, while Shuar children consolidate candy so that they have it either all today or all tomorrow.

These findings are the first to highlight that cross-cultural differences in risk preferences and time preferences exist, and that they can be traced into childhood. Deploying a cross-cultural perspective can help us better understand the diversity of cognitive development in the world and begin to assess which environmental cues may be important in promoting this variability.