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Salience, Risky Choices and Gender

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  • Booth, Alison L
  • Nolen, Patrick

Abstract

Risk theories typically assume individuals make risky choices using probability weights that differ from objective probabilities. Recent theories suggest that probability weights vary depending on which portion of a risky environment is made salient. Using experimental data we show that salience affects young men and women differently, even after controlling for cognitive and non-cognitive skills. Men are significantly more likely than women to switch from a certain to a risky choice once the upside of winning is made salient, even though the expected value of the choice remains the same.

Suggested Citation

  • Booth, Alison L & Nolen, Patrick, 2012. "Salience, Risky Choices and Gender," CEPR Discussion Papers 8868, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:8868
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    References listed on IDEAS

    as
    1. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2010. "Are Risk Aversion and Impatience Related to Cognitive Ability?," American Economic Review, American Economic Association, vol. 100(3), pages 1238-1260, June.
    2. Booth, Alison & Cardona-Sosa, Lina & Nolen, Patrick, 2014. "Gender differences in risk aversion: Do single-sex environments affect their development?," Journal of Economic Behavior & Organization, Elsevier, vol. 99(C), pages 126-154.
    3. Steffen Huck & Wieland Müller, 2012. "Allais for all: Revisiting the paradox in a large representative sample," Journal of Risk and Uncertainty, Springer, vol. 44(3), pages 261-293, June.
    4. Alison L. Booth & Patrick Nolen, 2012. "Gender differences in risk behaviour: does nurture matter?," Economic Journal, Royal Economic Society, vol. 122(558), pages 56-78, February.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Salience, Risky Choices and Gender
      by Nicholas Gruen in Club Troppo on 2012-03-23 07:47:49

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    Cited by:

    1. Friehe, Tim & Pham, Cat Lam, 2020. "Settling with salience-biased defendants," Economics Letters, Elsevier, vol. 192(C).
    2. Booth, Alison & Cardona-Sosa, Lina & Nolen, Patrick, 2014. "Gender differences in risk aversion: Do single-sex environments affect their development?," Journal of Economic Behavior & Organization, Elsevier, vol. 99(C), pages 126-154.
    3. Adrian Bruhin & Maha Manai & Luis Santos-Pinto, 2018. "Risk and Rationality:The Relative Importance of Probability Weighting and Choice Set Dependence," Cahiers de Recherches Economiques du Département d'économie 18.04, Université de Lausanne, Faculté des HEC, Département d’économie.
    4. Adrian Bruhin & Maha Manai & Luis Santos-Pinto, 2019. "Risk and Rationality:The Relative Importance of Probability Weighting and Choice Set Dependence," Cahiers de Recherches Economiques du Département d'économie 19.01new, Université de Lausanne, Faculté des HEC, Département d’économie.
    5. Adrian Bruhin & Maha Manai & Luis Santos-Pinto, 2018. "Risk and Rationality:The Relative Importance of Probability Weighting and Choice Set Dependence," Cahiers de Recherches Economiques du Département d'économie 18.04, Université de Lausanne, Faculté des HEC, Département d’économie.
    6. Königsheim, C. & Lukas, M. & Nöth, M., 2019. "Salience theory: Calibration and heterogeneity in probability distortion," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 477-495.
    7. Xiangfeng Ji & Xiaoyu Ao, 2021. "Travelers’ Bi-Attribute Decision Making on the Risky Mode Choice with Flow-Dependent Salience Theory," Sustainability, MDPI, vol. 13(7), pages 1-24, April.
    8. Kelvin Balcombe & Iain Fraser & Abhijit Sharma, 2021. "An econometric analysis of salience theory," Bulletin of Economic Research, Wiley Blackwell, vol. 73(4), pages 545-554, October.
    9. Rau, Holger A., 2014. "The disposition effect and loss aversion: Do gender differences matter?," Economics Letters, Elsevier, vol. 123(1), pages 33-36.

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    More about this item

    Keywords

    cognitive ability; gender; probability weights; risk-aversion;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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