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Hogarth and Einhorn (1990) posited a psychological model for updating beliefs that is based on an anchoring and adjustment process which incorporates a contrast or surprise effect; in particular, the larger the current belief in a hypothesis or outcome, the more it is discounted by negative information and the less it is increased by positive information. The model provides a set of predictions that could be of important implications for financial decisions. It predicts strong recency effects for mixed or conflicting information (negative and positive), and no order effects for consistent information (all positive or all negative). Furthermore, an earlier version of the model (1985) predicts that simultaneous processing of consistent information leads to more extreme responses than the sequential processing of the same information. Einhorn and Hogarth refer to this phenomenon as a “dilution effect.” This paper reports the results of testing these qualitative predictions of the belief updating model. Three experiments involving a content rich scenario of asset valuation judgment were conducted using a sample of 120 subjects enroled in two MBA courses. The results support the model's prediction that there is no order effects attributable to sequential processing of consistent information. The results also support the existence of recency effects for mixed information regardless of the response mode. However, no significant effects were observed for processing consistent information under different response modes.

With globalisation and the opening of China’s borders, there has been increasing business and government interaction between China and the US. Given US interest in China’s market and the cultural distance between these two countries, it is imperative for US business persons not only to understand Chinese values, but also to examine how Chinese relate to US values. To this end, this study examines the attitudes of a sample of Chinese with regard to 10 US core values and compares their attitudes to those of a sample of US Americans. Despite some significant differences, the results of this study point out that the Chinese and US respondents exhibited many similarities in their attitudes.