Based on Your Understanding of Your Roommate's Preferences, You Predict

question 40

Multiple Choice

Based on your understanding of your roommate's preferences, you predict that he will select the spaghetti for his lunch at the cafeteria, but instead he chooses the gyros. How do you describe this event in terms of economic theory?

• A) Your roommate is irrational.
• B) Your roommate does not know what is in his own best interests.
• C) You roommate does not know his own preferences as well as you do.
• D) You constructed a model that made a prediction, and the prediction was refuted.

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Definitions:

Experimental Realism

The extent to which study participants get so caught up in the procedures that they forget they are in an experiment.

Mundane Realism

The degree to which an experiment or research setting resembles the real-world scenarios it aims to replicate or study.

"Real World"

Term often used to refer to the practical, everyday life experiences and situations outside of controlled or theoretical environments.

Field Experiments

Research studies conducted in natural settings outside the laboratory to study the effect of independent variables on real-life behaviors.