The Role of Salience and Attention in Choice under Risk: An Experimental Investigation
We conduct three experiments using a combination of lottery choices and eyetracking data to test the role of salience and attention in risky choice. In our first experiment, subjects choose between risky lotteries as we manipulate the “economic salience” of payoffs by varying the correlation between lotteries. Risk taking declines monotonically with correlation, which is consistent with a salience mechanism, but inconsistent with expected utility and prospect theory. In our second experiment, subjects choose between a risky lottery and a certain option while we measure attention with eyetracking data. We find that attention to the risky lottery’s upside is correlated with the probability of taking risk. In our final experiment, we test whether “visual salience” affects risk taking. We find that risk taking increases when the risky lottery’s upside becomes visually salient, and it decreases when the downside becomes visually salient. These results demonstrate that attention causally affects risk taking.
Salience, Attention, Eyetracking, Decision-Making under Risk, Prospect Theory
SMU Cox: Marketing (Topic)