In this article, we present a new framework for interpreting cultural differences in behavior -- what we call the institutional approach. In this framework, individuals' behaviors are conceptualized as strategies adapted to various incentive structures. Cultural differences in behavior are thus viewed as differences in the default adaptive strategies that individuals come to rely on in unclear situations. Through two studies, we demonstrate that the East Asian "preference" for conformity is actually a default strategy to avoid accrual of negative reputation. When the possibility for negative evaluations in a given situation was clearly defined, cultural differences in the tendency for uniqueness disappeared. This approach carries important implications to psychologists who interpret cultural differences in behavior in terms of preferences, and can serve as a common framework branching out toward other disciplines in the social sciences.