Investment Behaviour of Chinese and United States Retail Investors under Risk Events

Abstract

This paper provides a comprehensive review of existing literature on decision-making behaviour of retail investors in China and the US when facing the same risk events. By comparing cross-national studies, behavioral economics theories and empirical analysis to find differences in risk perception and herd behaviour. It shows that cultural background, regulatory and informational environments are key influencing factors. Which means that Chinese retail investors tend to react more quickly and emotionally to policies, while US retail investors are on the other side they based on company fundamental and more concern about long-tern returns. For example, the lack of direct comparative data undermines the persuasiveness of research conclusions to a certain extent; moreover, different studies adopt diverse modeling frameworks, making it difficult to effectively integrate and compare the research results. Based on this, future research should strive to construct clearer and more comprehensive cross-cultural datasets to provide a more solid data foundation for studies. Additionally, it is necessary to deeply explore the impact of psychological biases on the decision-making behaviors of Chinese and American retail investors, so as to further improve the relevant research system.