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An Econometric Analysis of Salience Theory

Kelvin, Balcombe, Iain, Fraser, Abhijit, Sharma (2020) An Econometric Analysis of Salience Theory. Bulletin of Economic Research, . ISSN 0307-3378. (In press) (Access to this publication is currently restricted. You may be able to access a copy if URLs are provided) (KAR id:82713)

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Language: English

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Abstract

In this paper, we econometrically examine the performance of Salience Theory (ST) for explaining observed behavior outside of a fully defined state contingent setting. Using a

presented. By estimating the implied dependence structure of payoffs consistent with ST, only a minority of people infer independent payoffs when attaching probabilities to states,

find that ST explains choice behaviour less consistently than Expected Utility. Thus, ST should not be assumed to be superior to the most prominent models within the literature when employed outside of particular contexts.

Item Type: Article
Uncontrolled keywords: Salience Theory, choice under risk, expected utility
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculties > Social Sciences > School of Economics
Depositing User: Iain Fraser
Date Deposited: 01 Sep 2020 09:23 UTC
Last Modified: 02 Sep 2020 15:08 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/82713 (The current URI for this page, for reference purposes)
Iain, Fraser: https://orcid.org/0000-0002-4689-6020
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