Work

Salience and Consumer Choice

Year: 2013

Type: article

Abstract: We present a theory of context-dependent choice in which a consumer’s attention is drawn to salient attributes of goods, such as quality or price. An attribute is salient for a good when it stands out among the good’s attributes relative to that attribute’s average level in the choice set (or, more broadly, the choice context). Consumers attach disproportionately high weight to salient attributes, and their choices are tilted toward goods with higher quality/price ratios. The model accounts for a variety of disparate evidence, including decoy effects and context-dependent willingness to pay. It also suggests a novel theory of misleading sales.

Source: Journal of Political Economy

DOI: 10.1086/673885

Authors: Pedro Bordalo, Nicola Gennaioli, Andrei Shleifer

Institutions: Royal Holloway University of London, Bocconi University, Harvard University

Language: English

Topic: Decision-Making and Behavioral Economics

Subfield: General Decision Sciences

Field: Decision Sciences

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2890020870

FWCI: 20.52

Cites: 66

Cited by: 953

Related to: 10