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Journal of Behavioral and Experimental Economics
Article . 2015 . Peer-reviewed
License: Elsevier TDM
Data sources: Crossref
EconStor
Research . 2015
Data sources: EconStor
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Violations of first-order stochastic dominance as salience effects

Authors: Dertwinkel-Kalt, Markus; Köster, Mats;

Violations of first-order stochastic dominance as salience effects

Abstract

Abstract In contradiction to expected utility theory, various studies find that splitting events or attributes into subevents and subattributes can reverse a decision maker’s choices. Most notably, these effects can induce first-order stochastic dominated choices. Such violations of first-order stochastic dominance are framing effects, which expected utility theory, cumulative prospect theory and salience theory of choice under risk cannot account for. However, we propose a version of salience theory which unravels the underlying mechanism triggering such effects and which can explain the impact of event- and attribute-splitting on choices. Hereby, we provide further rationale for the broad validity of the salience mechanism and its strong descriptive power concerning human decision making.

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Keywords

First-order stochastic dominance, First-order stochastic dominance,Framing effects,Prospect theory,Salience theory, ddc:330, Framing effects, D8, Prospect theory, Salience theory, jel: jel:D8

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
12
Top 10%
Average
Average
bronze