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 try to get your attention on the market wall.
creating 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 / 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 to 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 technique in communication.
The opposite "smart" tricks are allusions, understatements, subliminal messages...
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 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 according to that
This works like a hammer hitting the same nail again and again.
Goebbels, a devilish propagandist, said:
"If you repeat one 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
there is no direct relation between that bait and the message topic
or goal (red herring).
(*) To find those messages: reach that Behavioral-Finance group and, once there,
1) click "messages", 2) enter your query in "search archives".
Members of the Behavioral Finance Group, please vote
on the glossary quality at Behavioral-Finance/polls