Salience and limited attention

In this study, we investigate how the salience of alternatives influences the attention of a decision maker in a natural extension of the model of choice with limited attention by Masatlioglu et al. (Am Econ Rev 102(5):2183-2205, 2012). We propose positive salience effects on the attention of a decision maker. For example, when an alternative to which a consumer pays attention becomes more salient in terms of the extent of product advertisement, she will still pay attention to it in a market. We manipulate the salience of alternatives to find choice reversals from observable choice data, which play an important role in our analysis. The advantages of our model over the Masatlioglu et al. (Am Econ Rev 102(5):2183-2205, 2012) model are that it broadens the application of the model of choice with limited attention, and improves the power of inferring the decision maker's preference and the alternatives to which she pays attention and does not pay attention.