Cultural Impact on Attitudes Towards Price Changes and Income Inequality Policy—A Study with Language Priming Method

Based on data collected from two surveys conducted in Germany and Taiwan, this paper examines the impact of culture through language priming (Chinese vs. German or English) on individuals’ price fairness perception and attitudes towards government intervention and economic policy involving inequality. We document large cross-language differences: in both surveys, subjects who were asked and answered in Chinese demonstrated significantly higher perceived price fairness in a free market mechanism than their counterparts who completed the survey in German or English language. They were also more inclined to accept a Pareto improvement policy which increases social and economic inequality. In the second survey, Chinese language induced also a lower readiness to accept government intervention in markets with price limits compared to English language. Since language functions as a cultural mindset prime, our findings imply that culture plays an important role in fairness perception and preferences regarding social and economic inequality.