A Regional Approach to Framing and Salience

We propose a novel regional preference model (RPM) where the framing of the decision problem affects the salience of a product through the region in which it lies, and the product’s salience affects the agent’s evaluation of it. RPM accounts for diverse sets of evidence that are anomalous from the traditional rational perspective. Our general framework encompasses the loss aversion model of Tversky and Kahneman [1991], the salient thinking model of Bordalo et al. [2013b], and the status quo bias model of Masatlioglu and Ok [2005]. RPM fulfills the challenge of integrating these theories into one cohesive and general model of salience. We specialize RPM to provide a behavioral foundation for the salient thinking model to highlight the salience model’s strong predictions and distinguish it from other existing models.