In a study with implications for businesspeople in a global economy,
researchers at the University of Chicago have found that people make
more rational decisions when they think through a problem in a
non-native tongue.
People are more likely to take favorable risks if they think in a
foreign language, the new study showed. "We know from previous research
that because people are naturally loss-averse, they often forgo
attractive opportunities," said UChicago psychologist Boaz Keysar, a
leading expert on communication. "Our new findings demonstrate that such
aversion to losses is much reduced when people make decisions in their
non-native language."
"A foreign language provides a distancing mechanism that moves people
from the immediate intuitive system to a more deliberate mode of
thinking," wrote Keysar, professor of psychology at UChicago, in the
paper, "The Foreign Language Effect: Thinking in a Foreign Tongue
Reduces Decision Biases." The paper, which appears in the current issue
of Psychological Science, was co-authored by UChicago graduate students Sayuri Hayakawa and Sun Gyu An.
In one of the most telling experiments, they tested native English
speakers at the University of Chicago who gained Spanish proficiency in
the classroom, in order to see how loss aversion influenced their
decision-making. The experiment explored how likely the students were to
take attractive bets depending on the language in which they considered
their options.
Each participant received $15 in dollar bills, from which they took
$1 for each bet. They could either keep the dollar or risk it for the
possibility of getting an extra $1.50 if they won a coin toss. So in
each round, they could net $2.50 if they won the toss, or get nothing if
they lost. The bets were attractive because statistically, the students
stood to come out ahead if they took all 15 bets.
When given the experiment in English, the students thought
myopically, researchers found. The students who considered the problem
in English focused on their fear of losing each bet, and took the bet
only 54 percent of the time. In contrast, students who did the
experiment in Spanish took the bet 71 percent of the time.
"Perhaps the most important mechanism for the effect is that a
foreign language has less emotional resonance than a native tongue,"
co-author Hayakawa said. "An emotional reaction could lead to decisions
that are motivated more by fear than by hope, even when the odds are
highly favorable."
The team also tested asymmetry in decision-making, which happens when
the same choice is framed either as a gain or a loss. In general,
people avoid risk when the question is framed in terms of gains, but
they seek risk when the question is framed in terms of losses. This
behavior runs counter to economic theory, which states that risk
evaluation should be independent of how a situation is described.
Through a series of experiments in Korea, France and the United
States, the team showed that asymmetry disappears when a person makes
decisions in a foreign language. The students were able to evaluate the
choices based on expected outcomes, rather than having their decisions
influenced by the different presentation of the problems.
The new findings are relevant to how people in a global society make
decisions as more individuals use a foreign language on a daily basis,
the researchers wrote. The results suggest that thinking in a foreign
language could be greatly beneficial in making decisions in a business
setting or in personal finance.
"People who routinely make decisions in a foreign language might be
less biased in their savings, investment and retirement decisions, as
they show less myopic loss aversion. Over a long time horizon, this
might very well be beneficial," the authors wrote.
So, is it always better to make economic decisions in a foreign
language? The team is currently investigating decisions where the
opposite is true. "It depends on the role of emotions in the specific
situation," Keysar said.
