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Research Details
A Theory of Strategic Uncertainty and Cultural Diversity, Review of Economic Studies
Abstract
We identify a new mechanism through which cultural diversity affects economic outcomes, based on a model of culture as shared cognition. Under this view, cultural diversity matters because it increases strategic uncertainty. The model can help better understand a variety of disparate evidence, including why homogeneous societies can be more conformist, why diverse societies may get stuck in a low-trust trap, why companies with a strong culture may fail to adopt superior work practices, and why autocratic rulers in diverse societies may overinvest in state capacity.
Type
Article
Author(s)
Willemien Kets, Alvaro Sandroni
Date Published
2021
Citations
Kets, Willemien, and Alvaro Sandroni. 2021. A Theory of Strategic Uncertainty and Cultural Diversity. Review of Economic Studies. 88: 287-333.