Salient Cues and Complexity

71 Pages Posted: 12 Nov 2020 Last revised: 3 Aug 2023

See all articles by Markus Dertwinkel-Kalt

Markus Dertwinkel-Kalt

University of Münster; Max Planck Institute for Research on Collective Goods

Mats Köster

Central European University (CEU)

Date Written: August 2, 2023


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 choice under risk. Consistent with our model, we find that complexity affects behavior only in the absence of a salient cue. Additional evidence on response times and memory supports our salience-based explanation. Our results can have important implications for how to design (information) policies that help consumers navigate complex decisions.

Keywords: Salience, Complexity, Skewness, Portfolio Selection, Naive Diversification

JEL Classification: D81

Suggested Citation

Dertwinkel-Kalt, Markus and Köster, Mats, Salient Cues and Complexity (August 2, 2023). Available at SSRN: or

Markus Dertwinkel-Kalt

University of Münster ( email )

Universitätsstraße 14-16
Münster, 48143

Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113

Mats Köster (Contact Author)

Central European University (CEU) ( email )

Quellenstraße 51

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