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Salience and Consumer Choice

Pedro Bordalo, Nicola Gennaioli and Andrei Shleifer

No 463, Working Papers from IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University

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 generally, the evoked set). 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 e ects, context-dependent willingness to pay, and large shifts in demand in response to price shocks.

Date: 2012
New Economics Papers: this item is included in nep-cbe, nep-com and nep-mic
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Citations: View citations in EconPapers (12)

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Journal Article: Salience and Consumer Choice (2013) Downloads
Working Paper: Salience and Consumer Choice (2013) Downloads
Working Paper: Salience and Consumer Choice (2012) Downloads
Working Paper: Salience and Consumer Choice (2012) Downloads
Working Paper: Salience and consumer choice (2012) Downloads
Working Paper: Salience and Consumer Choice Downloads
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