Cultural and Economic Factors in Maximizing: Differences in Rural-Urban Contexts in India

The present study aimed to understand rural-urban differences in decision-making in India, a developing country, with a particular focus on the urban context. The decision preference assessed in the study was that of maximizing, that is, searching for superior options, and satisficing, that is, choosing an adequate option. The main prediction was that people in the urban metropolitan context would maximize more than people in the rural context, and this difference would be mediated by a complex interplay of cultural, market, and economic factors. The cultural factors considered were relational mobility and perception of a tight-loose society. Further, the socio-market value of hierarchic self-interest, economic factors of income and ease of spending, and perceptions of necessity and luxury were considered. A field survey was conducted in a rural and a metropolitan region of Northern India, involving farmers and corporate employees, respectively (N = 378). The findings show that urban participants maximized more than rural participants. This difference was mediated by factors of success orientation in hierarchic self-interest, perception of luxury, and ease of spending, highlighting the intricate nature of decision-making in different contexts. These findings have practical implications for individuals and policymakers in developing countries, particularly in the context of the transition of urbanization and the opening of markets.