Salience Theory of Choice Under Risk

By A. Shleifer, N. Gennaioli, P. Bordalo. 2012

713 citations recorded by the source corpus.

Subfields: Economics and Econometrics, General Decision Sciences, Safety Research

View Paper: https://www.semanticscholar.org/paper/0dd659f78b5b714b87ad93818972d5fc89a4b3b4

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Citations in the corpus

Can nudges be transparent and yet effective (2018, positive): “According to salience theory formulated by Bordalo et al. (2012), more salient attributes will be over-weighted in the decision process.”
Cognitive Imprecision and Small-Stakes Risk Aversion (2018, neutral): “For example, quick judgments can be made about the number of dots present in a visual display of a random cloud of dots, without taking the time to actually count them.(8) As with perceptions of physical magnitudes such as length or area, such judgments of numerosity are subject to random error.”
Expectations and Investment (2015, neutral): “…more salient in people’s minds that lead to distorted probability weighting, but this explanation would fall into the category of cognitive biases (Bordalo et al (2012)). d. Conditional expectations vs other conditional moments Properties of rational expectations tests are stated under the case…”
Housing markets in a pandemic: Evidence from historical outbreaks (2020, background): “…theoretical and empirical work shows that when risks are salient, and when events trigger negative emotions, risk aversion can temporarily increase signiﬁcantly (e.g. Bordalo et al., 2012; Cohn et al., 2015; Guiso et al., 2018; Loewenstein, 2000 ), and aﬀect risk perception ( Slovic et al., 2007 ).”
Learning Through Noticing: Theory and Evidence from a Field Experiment (2014, methodology): “For more recent approaches to modeling limited attention in economic settings, see Sims (2003), Bordalo, Gennaioli, and Shleifer (2012, 2013), Koszegi and Szeidl (2013), and Gabaix (2013). nloaded from https://academ ic.oup.com /qje/article-abstract/129/3/1311/1817927 by U niversity of C hicago…”
Psychology-based Models of Asset Prices and Trading Volume (2018, background): “To explain these results, the authors couple a rational-inattention framework of the kind commonly used in macroeconomics with Bordalo et al.’s (2018a) diagnostic expectations framework, described in Section 4.3. In this model, each analyst receives a noisy signal of the current value of the quantit”
Household Portfolio Underdiversification and Probability Weighting: Evidence from the Field (2018, neutral): “We note that the salience model of Bordalo et al. (2012) is not defined for δ > 1, that is, underweighting of salient outcomes is not allowed.”
Divergence between individual perceptions and objective indicators of tail risks: Evidence from floodplain residents in New York City (2015, result): “…individual decisions are consistent with the probability-weighting function of prospect theory, with mixed results (for instance, see Tversky and Kahneman 1992; Bordalo, Gennaioli, and Shleifer 2012; Fehr-Duda and Epper 2012; Barberis 2013b; Barseghyan et al. 2013a,b; Carman and Kooreman 2014).”
Salience and Consumer Choice (2013, positive): “It accounts for a broad range of context-dependent choices, both in riskless environments and in choice under risk ðBordalo et al. 2012Þ.”
The Demand for, and Avoidance of, Information (2015, neutral): “…preference (Fehr and Rangel, 2011), and behavioral economists are now recognizing the role attention plays in a variety of economic behaviors (Gabaix and Laibson, 2006; DellaVigna and Pollet, 2009; Bordalo et al., 2012a; Bordalo et al., 2012b; Köszegi and Szeidl, 2013; Bhatia and Golman, 2013).”