An Economist Encounters Some Unexpected Behavior in a Market or Laboratory

question 8

Multiple Choice

An economist encounters some unexpected behavior in a market or laboratory setting.How can he or she distinguish between behavior resulting from mistakes by decision makers as opposed to being decisions based on unusual preferences?

• A) if the same behavior is observed repeatedly even after opportunities to learn are provided, it is probably not a mistake.
• B) if the behavior is observed more often with inexperienced subjects, it is likely a mistake.
• C) both a and b.
• D) it is impossible to distinguish between mistakes and unusual preferences empirically.

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Definitions:

Unilateral Imitation

The process of copying the actions or behaviors of another individual without reciprocal behavior from the other side.

Longitudinal Study

A research method that involves repeated observations of the same variables over a period of time, which can extend over years or decades.

Temperament

Temperament refers to the inherent aspects of an individual's personality, such as introversion or extroversion, which are evident from a very early age and are somewhat influenced by genetics.

Exuberant

Filled with or characterized by a lively energy and excitement.