Traditional behavioral economics describes the non-rationality of decision-making by cognitive biases and justifies interventions, including nudging, based on frameworks like libertarian paternalism. These models are however highly embedded within Western individualistic settings and tend to ignore the influence of social constructs in influencing decision-making within collectivist cultures. This study explores the mediation of economic decision making by gender, socio-economic status and social norms in a collectivist setting and seeks to establish context-based conceptualisation of rationality. Using a qualitative research design, the study employs a constructivist grounded theory approach informed by abductive reasoning. This research is based on 32 semi-structured interviews conducted using voluntary sampling among students in the Forman Christian College University. Analysis of data was done by direct audio coding. Results indicate that rationality is not singular or monetary but gendered and stratified in terms of classes. Rationality in men is a factor that focuses on accumulating tangible wealth with a wide range of social exemptions provided when they play the role of a provider. In the case of women, the leading currency is izzat (social honor), which is preserved by aesthetic display and strong compliance with social norms. Women often sacrifice financial security to izzat even at the expense of negative financial equity. This is due to an asymmetry of risk where financial loss can be recovered whereas reputational loss is irreparable reputational bankruptcy. The rich women acquire immunity and avoid numerous restrictions. These results mean that current models cannot be applied universally by demonstrating that rationality is context-based and influenced by dominant social currencies. The study redefines rationality as a multi-dimensional and culturally embedded process and proposes collectivist nudges that align financial goals with the protection of social standing. This has significant implications in designing effective behavioral interventions in non-Western settings.
Ali et al. (Mon,) studied this question.