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 eects and context-dependent willingness to pay. It also suggests a novel theory of misleading sales.

Salience and consumer choice

Bordalo, Pedro;Gennaioli, Nicola;Shleifer, Andrei
2013

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 eects and context-dependent willingness to pay. It also suggests a novel theory of misleading sales.
2013
Bordalo, Pedro; Gennaioli, Nicola; Shleifer, Andrei
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11565/3853098
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