Culture,information,cognitive Bias Behind Insufficient Consumption And The Correction Of Cognitive Bias By International Migration Tendencies

Consumption deficiency has always been a major issue in China.However,the current understanding based on studies of rationality and its origin can hardly explain the reality.On the basis of the existing literature,this paper attempts to change the perspective,loosing the hypothesis of rational person,and basing on the complete cognitive decision-making process.From the perspective of information loss and cultural differences,this paper discuss the formation mechanism of cognitive bias,focusing on the impact of cognitive bias on consumer behavior and further studying on the correction effect of international migrants on cognitive bias.The research tries to achieve the following innovations: First,the innovation of academic thought.This paper explores the problem of insufficient consumption in China from a new perspective of bounded rationality.Specifically,based on different theoretical perspectives from classical economics,combined with research results in psychology and behavioral economics,this paper introduces subjective factors of cognitive bias,including cognitive bias caused by incomplete information and culture,to find out the causes of insufficient consumption in China.it deeply explains the internal relationship between incomplete information,culture differences,cognitive bias and abnormal consumption.Second,the innovation of contents.This paper explores the causes and influences of cognitive bias from the perspective of cultural differences and incomplete information,explaining the manifestations and the influence to consumption of cognitive bias in farming culture and nomadic culture,and discussing the influence of cognitive bias of wealth overconfidence and underconfidence on consumer behavior.Based on the background of globalization,this paper explores the transmission mechanism of complementary international information and integration of cultural exchanges to correct cognitive bias,and provides new micro-basis and ideas for China to formulate effective policies to stimulate consumption.Third,the innovation of research methods.This paper introduces cognitive biases caused by culture and incomplete information into the consumption theory model,establishing a theoretical model containing incomplete information and cultural influence,and solving it.In the empirical analysis,micro-data is used to improve the empirical index system of the above cognitive bias,and the robustness test and heterogeneity analysis of the empirical results are carried out from multiple perspectives.This study mainly includes six aspects: introducing the current situation and characteristics of Chinese consumption and international migration;analyzing the transmission mechanism of incomplete information,culture,cognitive bias and consumption;establishing and solving the theoretical model of consumers' optimal decision-making considering incomplete information and cultural influence;the empirically test of overconfidence cognitive bias and its impact on consumption;the empirically test of cultural-induced cognitive bias and its impact on consumption;the correction effect of international migrants on cognitive bias caused by incomplete information and cultural differences is empirically tested;and summarizing the main points of this paper,putting forward some policy suggestions to further expand consumption in China.First,this paper gives a brief introduction to the current situation and characteristics of Chinese consumption and international migration.From the two data dimensions of vertical historical analysis and horizontal international comparison,this part reveals the long-standing problem of insufficient consumption in China and the Chinese international emigration status.Second,it analyses the mechanism of incomplete information,culture,cognitive bias and consumption,then establishes and solves the theoretical model of consumers' optimal decision-making considering the influence of incomplete information and culture.Firstly,this part discusses the mechanism of incomplete information,cognitive bias and consumer behavior as well as the transmission mechanism of culture,cognitive bias and consumer behavior respectively.Then,this part technically express the differences of self-control,intergenerational transfer preference and risk preference,and solve the deviation results of incomplete information and cultural cognitive bias optimal consumption decision-making respectively.Third,the paper examines the mechanism of cognitive bias of overconfidence and underconfidence in wealth and its impact on consumption.The empirical tests using the matching data of the "China Household Financial Survey"(CHFS)in2015 and its policy survey data in the second quarter of 2016.The empirical results show that the degree of information integrity of others can correct the cognitive deviation of wealth overconfidence and underconfidence.The cognitive bias of wealth underconfidence significantly reduced the total consumption of the family,and the cognitive bias of wealth overconfidence significantly increased the consumption of the family.Forth,it tests the mechanism of cognitive bias caused by culture differences and its impact on consumption.The empirical analysis was conducted by empirical methods such as propensity score matching(PSM),instrumental variable method(2SLS),Tobit regression and Orthogonal least square method(OLS),using the matching data of the "China Household Financial Survey"(CHFS)in 2015 and its policy survey data in the second quarter of 2016 combined with the macro data of CEIC database.The empirical results show that the extensive agricultural culture in China has three cognitive biases: excessive self-control,risk aversion and intergenerational transfer preference.Excessive self-control and risk aversion will significantly inhibit consumption in the current period,and the social network effect brought by intergenerational transfer preference will promote consumption under the influence of social network effect.All in all,three cognitive biases in farming culture show the inhibitory effect on consumption.Fifth,this paper examines the effects of international migration on the correction of cognitive biases caused by incomplete information and cultural differences.The empirical tests using the matching data of the "China Household Financial Survey"(CHFS)in 2015 and its policy survey data in the second quarter of 2016,combined with the macro data from CEIC database.The empirical results show that international migration significantly alleviates the cognitive bias of wealth overconfidence,but the correction effect of the cognitive deviation of wealth underconfidence is not significant.International migration significantly alleviates the cognitive bias of self-control and risk aversion preference of agricultural culture,but the correction effect of intergenerational transfer preference of agricultural culture is not significant.Sixth,through the theoretical and empirical research on incomplete information,culture,cognitive bias and consumption behavior,this paper mainly draws the following conclusions: under the influence of incomplete information,consumers have the cognitive bias of wealth overconfidence and underconfidence.Among them,the cognitive bias of wealth underconfidence significantly reduces the total consumption of the family,and the cognitive deviation of wealth overconfidence significantly promotes the family consumption.Moreover,there are three cognitive biases in Chinese farming culture: excessive self-control,risk aversion and intergenerational transfer preference.Among them,excessive self-control and risk aversion will significantly inhibit consumption in the current period,and the social network effect brought by intergenerational transfer preference will promote consumption under the influence of social network effect.All in all,three cognitive biases in farming culture show the inhibitory effect on consumption.Considering the current situation of cognitive biases,namely,underconfidence in wealth and three farming culture cognitive biases in China,it is necessary to implement supplementary policies to correct the inhibitory effect of cognitive biases on consumption in addition to the traditional consumption policies.