Behavioral finance FAQ / Glossary (Salience)

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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,
i: incidental

Salience, saliency, salient

01/11i + see reaction, weak signal,
percolation threshold,
attention bias,
cognitive overload, spotlight stock,
availability heuristic


Attention getter

Salient enough? Larger stars on demand!


Salience is the capability of a "stimulus" (an event,
an information, a sign or whatever...) to readily attract
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
displayed food
(salient information vs. relevant information).

Salience plays a part in asset market prices and returns.

Some very visible / eye-catching / striking /
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
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
percolation threshold.

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.

Man-made salience

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
or lenders,
stress favorable data in a salient and
    rosy-colored way,

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
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".

Members of the BF Group, please
 vote on the glossary quality at BF polls


This page last update: 25/08/15  

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