Behavioral finance FAQ / Glossary (Salience)
This is a separate page of the S section of the Glossary
Dates of related message(s) in the
Behavioral-Finance group (*):
Year/month, d: developed / discussed,
Salience, saliency, salient
01/11i + see reaction, weak signal,
percolation threshold, attention bias,
cognitive overload, spotlight stock,
Salient enough? Larger stars on demand!
Salience is the capability of a "stimulus" (an event,
an information, a sign or whatever...) to readily attract
attention and make the receiver react.
A salient information is the opposite of a "weak signal" ,
and even more of a "noise" (see the related articles).
And also of course the opposite of ...nothing!
Except that an absence of signal could be telltale also!
Salience in asset markets
Flashy posters on the market wall might get your attention
But they can create confusion about the quality of the
(salient information vs. relevant information).
Salience plays a part in asset market prices and returns.
Some very visible / eye-catching / striking /
conspicuous events (or traits) can have
immediate and strong impacts.
A company gets (or fails to get) a huge contract for example.
Some less blatant information stay unnoticed by
investors, or have no immediate price incidence
...although they might prove later to have been as important -
or even more important - for the asset's destiny.
This shows a time-salience:
Some stimuli need to be received for a sizeable amount of
time and enough repetitions (see lag, latency) before
bringing responses from those who receive it.
It is a cumulative effect that has some similitude with the
Although it is not completely related, a study has shown that a stock
name that is easy to spell and pronounce (and remember)
is apter to attract investors than a complicated / obscure one.
Presenting the best face and the easiest to grasp messages...
...whatever their truth or relevancy
To create salient messages, such a "catch phrases" or pregnant pictures,
is a of course a deliberate communication technique.
The opposite "smart" tricks are allusions, understatements, subliminal
Salience could even be used as manipulation or bait,
by diverting the attention of the people receiving the information.
A firm could, when presenting its situation to
investors or lenders, stress favorable data in a salient and
while insisting less on unfavorable ones.
This is a subtle form of "framing" (see that word).
Also, to repeat often some information
(even false news), creates a time-salience that entices to act
according to that information.
This works like a hammer hitting the same nail again and again.
Goebbels, a devilish propagandist, said: "If you repeat a thousand
times a falsehood, it becomes a truth",
Some messages might be emotionally salient / emotion raising by
playing on the receiver's feelings.
Also they might give more weight to what is his / her dominant
mental interest at the moment.
All this catches the receiver's attention (see selective attention), even
if no direct relation exists between that bait and the message
topic or goal (red herring).
(*) To find those messages: reach that BF group and, once there,
1) click "messages", 2) enter your query in "search archives".
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