Salience, Risky Choices and Gender
11 Pages Posted: 10 Mar 2012
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.
Keywords: gender, salience, risk-aversion, probability weights, cognitive ability
JEL Classification: D8, D81, J16
Suggested Citation: Suggested Citation