Past research suggests that people with different thinking styles show different cognitive processes. Accordingly, we test how thinking style and advice jointly affect investment decision. We conduct three experiments with 530 participants. In Study 1, coin, card and stamp investors who had high levels of holistic thinking and made decisions on their own obtained the lowest returns. In Study 2, participants who used analytic thinking to make decisions on their own in the Balloon Analog Risk Task (BART) earned the most. In Study 3, Westerners who made decisions on their own using analytic thinking had the highest incomes, while Easterners using holistic thinking and listening to others also had positive returns. The results support the framing effect in investment decisions, and the two simulation paradigms are presented for future studies and to confirm the impacts of thinking styles.
Keywords: Holistic thinking; analytic thinking; decision-making; framing effect.