Salient Cues and Complexity

• 成果类型: Article
• 署名作者: Dertwinkel-Kalt, Markus; Koester, Mats
• 署名单位: University of Munster; Max Planck Society
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.00652
• 发表日期: 2025
• 关键词: salience; complexity; skewness; PORTFOLIO SELECTION; NAIVE DIVERSIFICATION

摘要

Important decisions are often complex, and existing evidence suggests that complexity can affect economic behavior. It is an open question, however, exactly when and how complexity matters. We hypothesize that salient cues-standing out in the choice context-mitigate the effect of complexity on choices. We theoretically develop and experimentally test this hypothesis in the context of portfolio selection. We find that, in both simple and complex problems, subjects seek highly right -skewed portfolios, which have an extreme and salient upside, and avoid highly left -skewed portfolios with an extreme and salient downside. Complexity does affect, however, choices among symmetric portfolios, which have neither a salient upside nor downside. Absent a salient cue, subjects diversify naively. Evidence on response times and memory supports our salience -based explanation.