2023
DOI: 10.1162/rest_a_01307
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Testing for Salience Effects in Choices under Risk

Abstract: We construct and run an experiment to test the most basic choice effect predicted by Salience Theory. Subjects allocate wealth between a risky and a safe investment. While we vary an apparent payoff ratio to influence salience, treatments have economically equivalent consequences. Most other theories of behavior then predict zero effect. Our experimental findings are strongly consistent with the behavioral implication of a continuous version of Salience Theory. We provide a novel structural estimate on the str… Show more

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Cited by 2 publications
(2 citation statements)
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“…Salience Theory, a promising new branch of Behavioral Economics [48 ▪▪ ,49–52], provides insights into the complex decision-making particularly relevant to HIV prevention, including PrEP use [53–55]. This theory posits that people's attention is limited [56], and decision-making is often influenced by the most salient features of the environment.…”
Section: At the Bottom Of The ‘Prep Cliff’: Insights From Behavioral ...mentioning
confidence: 99%
“…Salience Theory, a promising new branch of Behavioral Economics [48 ▪▪ ,49–52], provides insights into the complex decision-making particularly relevant to HIV prevention, including PrEP use [53–55]. This theory posits that people's attention is limited [56], and decision-making is often influenced by the most salient features of the environment.…”
Section: At the Bottom Of The ‘Prep Cliff’: Insights From Behavioral ...mentioning
confidence: 99%
“…Recently, Lanzani (2022) axiomatized STR, and argued that for representing preferences among acts with outcomes associated with correlated events, using continuous salience functions is desirable. Moreover, the continuous version of the salience function has been the most used one in the empirical literature (Dertwintel-Kalt et al, 2021;Nielsen et al, 2021). Considering that, and the fact that correlation of events' probabilities plays a highly important role in decision under ambiguity, we consider here the continuous version of salience weighting as the standard for the application of our probability weighting function to Salience Theory.…”
Section: Ambiguity Attitude Salience and Context-dependencementioning
confidence: 99%