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Cloze Test for IBPS PO Pre - Set 11
 
Question 1
Below, a passage is given with ten labeled blanks. Below the passage, five options are given for each blank, choose the word that fits each blank most appropriately in the context of the passage and mark the corresponding answer   Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of, ...
Below, a passage is given with ten labeled blanks. Below the passage, five options are given for each blank, choose the word that fits each blank most appropriately in the context of the passage and mark the corresponding answer
 
Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of societies, countries, corporations and the global macro economy itself are meant to fit certain models, at the heart of which are rational agents maximizing their utility or welfare. However, economic models are, to varying degrees, 2) __________ of the real world in which economic agents are all too often not rational. For decades, American economist Richard H. Thaler has studied how decision-making deviates from rational 3) __________ in the real world and how this can actually be incorporated into economic modeling. His analysis married economics to human psychology and his work has formed the core of the field of behavioral economics. It is for his 4) __________ contributions to this field that Prof. Thaler was awarded the Economics Nobel on Monday. The Royal Swedish Academy of Sciences cited his analysis of how decision-makers deviate systematically from rational behavior as conceived in traditional economic theory. For instance, individuals experience bounded rationality due to 5) ____________ limitations. Two, they have social preferences such as caring for others. And three, they sometimes lack self-control. These are situations that every individual can relate to. In explaining the relevance of Prof. Thaler’s work and their decision to award him the prize, the committee highlighted its everyday 6) ____________. Consider, for instance, the existence of social preferences. It would be rational for a shop to increase the price of umbrellas on a rainy day but customers would probably think of this as an unfair or 7) __________ policy if they were aware of the regular price. Their preference for fairness is thus a factor that keeps the shop from increasing the price of umbrellas according to the weather, when rational behavior in traditional economic theory would warrant an increase. It is through such applications that behavioral economics has made economics as a whole more 8) ___________ and familiar. Richard Thaler had, as the Nobel committee put it, made economics more human. Behavioral economics, like any other, is not free of criticism — in this case, of being a patchwork of cognitive psychology and mathematics, with so many individual exceptions that it neither has the rigour of mathematics nor is free enough of modeling to be pure psychology. There are several psychologists and economists with whom Prof. Thaler has collaborated, including Amos Tversky and the 2002 Economics Nobel winner Daniel Kahneman. In a 2008 book Nudge, Prof. Thaler and Cass Sunstein show how behavioral economics can be used in policy-making to 9) _________ behaviors. It is here that they introduce the concept of libertarian paternalism, where “choice architects” influence the behavior of individuals to make their lives “longer, healthier and better” but in a way that gives individuals the freedom to not participate in arrangements that are not to their taste. And with governments slowly incorporating it into policy, behavioral economics has not been 10) _____ to campuses.
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Question 2
Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of societies, countries, corporations and the global macro economy itself are meant to fit certain models, at the heart of which are rational agents maximizing their utility or welfare. However, economic models are, to varying degrees, 2) __________ of the real world, ...
Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of societies, countries, corporations and the global macro economy itself are meant to fit certain models, at the heart of which are rational agents maximizing their utility or welfare. However, economic models are, to varying degrees, 2) __________ of the real world in which economic agents are all too often not rational. For decades, American economist Richard H. Thaler has studied how decision-making deviates from rational 3) __________ in the real world and how this can actually be incorporated into economic modeling. His analysis married economics to human psychology and his work has formed the core of the field of behavioral economics. It is for his 4) __________ contributions to this field that Prof. Thaler was awarded the Economics Nobel on Monday. The Royal Swedish Academy of Sciences cited his analysis of how decision-makers deviate systematically from rational behavior as conceived in traditional economic theory. For instance, individuals experience bounded rationality due to 5) ____________ limitations. Two, they have social preferences such as caring for others. And three, they sometimes lack self-control. These are situations that every individual can relate to. In explaining the relevance of Prof. Thaler’s work and their decision to award him the prize, the committee highlighted its everyday 6) ____________. Consider, for instance, the existence of social preferences. It would be rational for a shop to increase the price of umbrellas on a rainy day but customers would probably think of this as an unfair or 7) __________ policy if they were aware of the regular price. Their preference for fairness is thus a factor that keeps the shop from increasing the price of umbrellas according to the weather, when rational behavior in traditional economic theory would warrant an increase. It is through such applications that behavioral economics has made economics as a whole more 8) ___________ and familiar. Richard Thaler had, as the Nobel committee put it, made economics more human. Behavioral economics, like any other, is not free of criticism — in this case, of being a patchwork of cognitive psychology and mathematics, with so many individual exceptions that it neither has the rigour of mathematics nor is free enough of modeling to be pure psychology. There are several psychologists and economists with whom Prof. Thaler has collaborated, including Amos Tversky and the 2002 Economics Nobel winner Daniel Kahneman. In a 2008 book Nudge, Prof. Thaler and Cass Sunstein show how behavioral economics can be used in policy-making to 9) _________ behaviors. It is here that they introduce the concept of libertarian paternalism, where “choice architects” influence the behavior of individuals to make their lives “longer, healthier and better” but in a way that gives individuals the freedom to not participate in arrangements that are not to their taste. And with governments slowly incorporating it into policy, behavioral economics has not been 10) _____ to campuses.
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Question 3
Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of societies, countries, corporations and the global macro economy itself are meant to fit certain models, at the heart of which are rational agents maximizing their utility or welfare. However, economic models are, to varying degrees, 2) __________ of the real, ...
Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of societies, countries, corporations and the global macro economy itself are meant to fit certain models, at the heart of which are rational agents maximizing their utility or welfare. However, economic models are, to varying degrees, 2) __________ of the real world in which economic agents are all too often not rational. For decades, American economist Richard H. Thaler has studied how decision-making deviates from rational 3) __________ in the real world and how this can actually be incorporated into economic modeling. His analysis married economics to human psychology and his work has formed the core of the field of behavioral economics. It is for his 4) __________ contributions to this field that Prof. Thaler was awarded the Economics Nobel on Monday. The Royal Swedish Academy of Sciences cited his analysis of how decision-makers deviate systematically from rational behavior as conceived in traditional economic theory. For instance, individuals experience bounded rationality due to 5) ____________ limitations. Two, they have social preferences such as caring for others. And three, they sometimes lack self-control. These are situations that every individual can relate to. In explaining the relevance of Prof. Thaler’s work and their decision to award him the prize, the committee highlighted its everyday 6) ____________. Consider, for instance, the existence of social preferences. It would be rational for a shop to increase the price of umbrellas on a rainy day but customers would probably think of this as an unfair or 7) __________ policy if they were aware of the regular price. Their preference for fairness is thus a factor that keeps the shop from increasing the price of umbrellas according to the weather, when rational behavior in traditional economic theory would warrant an increase. It is through such applications that behavioral economics has made economics as a whole more 8) ___________ and familiar. Richard Thaler had, as the Nobel committee put it, made economics more human. Behavioral economics, like any other, is not free of criticism — in this case, of being a patchwork of cognitive psychology and mathematics, with so many individual exceptions that it neither has the rigour of mathematics nor is free enough of modeling to be pure psychology. There are several psychologists and economists with whom Prof. Thaler has collaborated, including Amos Tversky and the 2002 Economics Nobel winner Daniel Kahneman. In a 2008 book Nudge, Prof. Thaler and Cass Sunstein show how behavioral economics can be used in policy-making to 9) _________ behaviors. It is here that they introduce the concept of libertarian paternalism, where “choice architects” influence the behavior of individuals to make their lives “longer, healthier and better” but in a way that gives individuals the freedom to not participate in arrangements that are not to their taste. And with governments slowly incorporating it into policy, behavioral economics has not been 10) _____ to campuses.
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  • E
Question 4
Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of societies, countries, corporations and the global macro economy itself are meant to fit certain models, at the heart of which are rational agents maximizing their utility or welfare. However, economic models are, to varying degrees, 2) __________ of the real world, ...
Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of societies, countries, corporations and the global macro economy itself are meant to fit certain models, at the heart of which are rational agents maximizing their utility or welfare. However, economic models are, to varying degrees, 2) __________ of the real world in which economic agents are all too often not rational. For decades, American economist Richard H. Thaler has studied how decision-making deviates from rational 3) __________ in the real world and how this can actually be incorporated into economic modeling. His analysis married economics to human psychology and his work has formed the core of the field of behavioral economics. It is for his 4) __________ contributions to this field that Prof. Thaler was awarded the Economics Nobel on Monday. The Royal Swedish Academy of Sciences cited his analysis of how decision-makers deviate systematically from rational behavior as conceived in traditional economic theory. For instance, individuals experience bounded rationality due to 5) ____________ limitations. Two, they have social preferences such as caring for others. And three, they sometimes lack self-control. These are situations that every individual can relate to. In explaining the relevance of Prof. Thaler’s work and their decision to award him the prize, the committee highlighted its everyday 6) ____________. Consider, for instance, the existence of social preferences. It would be rational for a shop to increase the price of umbrellas on a rainy day but customers would probably think of this as an unfair or 7) __________ policy if they were aware of the regular price. Their preference for fairness is thus a factor that keeps the shop from increasing the price of umbrellas according to the weather, when rational behavior in traditional economic theory would warrant an increase. It is through such applications that behavioral economics has made economics as a whole more 8) ___________ and familiar. Richard Thaler had, as the Nobel committee put it, made economics more human. Behavioral economics, like any other, is not free of criticism — in this case, of being a patchwork of cognitive psychology and mathematics, with so many individual exceptions that it neither has the rigour of mathematics nor is free enough of modeling to be pure psychology. There are several psychologists and economists with whom Prof. Thaler has collaborated, including Amos Tversky and the 2002 Economics Nobel winner Daniel Kahneman. In a 2008 book Nudge, Prof. Thaler and Cass Sunstein show how behavioral economics can be used in policy-making to 9) _________ behaviors. It is here that they introduce the concept of libertarian paternalism, where “choice architects” influence the behavior of individuals to make their lives “longer, healthier and better” but in a way that gives individuals the freedom to not participate in arrangements that are not to their taste. And with governments slowly incorporating it into policy, behavioral economics has not been 10) _____ to campuses.
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  • C
  • D
  • E
Question 5
Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of societies, countries, corporations and the global macro economy itself are meant to fit certain models, at the heart of which are rational agents maximizing their utility or welfare. However, economic models are, to varying degrees, 2) __________ of the real world, ...
Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of societies, countries, corporations and the global macro economy itself are meant to fit certain models, at the heart of which are rational agents maximizing their utility or welfare. However, economic models are, to varying degrees, 2) __________ of the real world in which economic agents are all too often not rational. For decades, American economist Richard H. Thaler has studied how decision-making deviates from rational 3) __________ in the real world and how this can actually be incorporated into economic modeling. His analysis married economics to human psychology and his work has formed the core of the field of behavioral economics. It is for his 4) __________ contributions to this field that Prof. Thaler was awarded the Economics Nobel on Monday. The Royal Swedish Academy of Sciences cited his analysis of how decision-makers deviate systematically from rational behavior as conceived in traditional economic theory. For instance, individuals experience bounded rationality due to 5) ____________ limitations. Two, they have social preferences such as caring for others. And three, they sometimes lack self-control. These are situations that every individual can relate to. In explaining the relevance of Prof. Thaler’s work and their decision to award him the prize, the committee highlighted its everyday 6) ____________. Consider, for instance, the existence of social preferences. It would be rational for a shop to increase the price of umbrellas on a rainy day but customers would probably think of this as an unfair or 7) __________ policy if they were aware of the regular price. Their preference for fairness is thus a factor that keeps the shop from increasing the price of umbrellas according to the weather, when rational behavior in traditional economic theory would warrant an increase. It is through such applications that behavioral economics has made economics as a whole more 8) ___________ and familiar. Richard Thaler had, as the Nobel committee put it, made economics more human. Behavioral economics, like any other, is not free of criticism — in this case, of being a patchwork of cognitive psychology and mathematics, with so many individual exceptions that it neither has the rigour of mathematics nor is free enough of modeling to be pure psychology. There are several psychologists and economists with whom Prof. Thaler has collaborated, including Amos Tversky and the 2002 Economics Nobel winner Daniel Kahneman. In a 2008 book Nudge, Prof. Thaler and Cass Sunstein show how behavioral economics can be used in policy-making to 9) _________ behaviors. It is here that they introduce the concept of libertarian paternalism, where “choice architects” influence the behavior of individuals to make their lives “longer, healthier and better” but in a way that gives individuals the freedom to not participate in arrangements that are not to their taste. And with governments slowly incorporating it into policy, behavioral economics has not been 10) _____ to campuses.
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Question 6
Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of societies, countries, corporations and the global macro economy itself are meant to fit certain models, at the heart of which are rational agents maximizing their utility or welfare. However, economic models are, to varying degrees, 2) __________ of the real world, ...
Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of societies, countries, corporations and the global macro economy itself are meant to fit certain models, at the heart of which are rational agents maximizing their utility or welfare. However, economic models are, to varying degrees, 2) __________ of the real world in which economic agents are all too often not rational. For decades, American economist Richard H. Thaler has studied how decision-making deviates from rational 3) __________ in the real world and how this can actually be incorporated into economic modeling. His analysis married economics to human psychology and his work has formed the core of the field of behavioral economics. It is for his 4) __________ contributions to this field that Prof. Thaler was awarded the Economics Nobel on Monday. The Royal Swedish Academy of Sciences cited his analysis of how decision-makers deviate systematically from rational behavior as conceived in traditional economic theory. For instance, individuals experience bounded rationality due to 5) ____________ limitations. Two, they have social preferences such as caring for others. And three, they sometimes lack self-control. These are situations that every individual can relate to. In explaining the relevance of Prof. Thaler’s work and their decision to award him the prize, the committee highlighted its everyday 6) ____________. Consider, for instance, the existence of social preferences. It would be rational for a shop to increase the price of umbrellas on a rainy day but customers would probably think of this as an unfair or 7) __________ policy if they were aware of the regular price. Their preference for fairness is thus a factor that keeps the shop from increasing the price of umbrellas according to the weather, when rational behavior in traditional economic theory would warrant an increase. It is through such applications that behavioral economics has made economics as a whole more 8) ___________ and familiar. Richard Thaler had, as the Nobel committee put it, made economics more human. Behavioral economics, like any other, is not free of criticism — in this case, of being a patchwork of cognitive psychology and mathematics, with so many individual exceptions that it neither has the rigour of mathematics nor is free enough of modeling to be pure psychology. There are several psychologists and economists with whom Prof. Thaler has collaborated, including Amos Tversky and the 2002 Economics Nobel winner Daniel Kahneman. In a 2008 book Nudge, Prof. Thaler and Cass Sunstein show how behavioral economics can be used in policy-making to 9) _________ behaviors. It is here that they introduce the concept of libertarian paternalism, where “choice architects” influence the behavior of individuals to make their lives “longer, healthier and better” but in a way that gives individuals the freedom to not participate in arrangements that are not to their taste. And with governments slowly incorporating it into policy, behavioral economics has not been 10) _____ to campuses.
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Question 7
Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of societies, countries, corporations and the global macro economy itself are meant to fit certain models, at the heart of which are rational agents maximizing their utility or welfare. However, economic models are, to varying degrees, 2) __________ of the real world, ...
Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of societies, countries, corporations and the global macro economy itself are meant to fit certain models, at the heart of which are rational agents maximizing their utility or welfare. However, economic models are, to varying degrees, 2) __________ of the real world in which economic agents are all too often not rational. For decades, American economist Richard H. Thaler has studied how decision-making deviates from rational 3) __________ in the real world and how this can actually be incorporated into economic modeling. His analysis married economics to human psychology and his work has formed the core of the field of behavioral economics. It is for his 4) __________ contributions to this field that Prof. Thaler was awarded the Economics Nobel on Monday. The Royal Swedish Academy of Sciences cited his analysis of how decision-makers deviate systematically from rational behavior as conceived in traditional economic theory. For instance, individuals experience bounded rationality due to 5) ____________ limitations. Two, they have social preferences such as caring for others. And three, they sometimes lack self-control. These are situations that every individual can relate to. In explaining the relevance of Prof. Thaler’s work and their decision to award him the prize, the committee highlighted its everyday 6) ____________. Consider, for instance, the existence of social preferences. It would be rational for a shop to increase the price of umbrellas on a rainy day but customers would probably think of this as an unfair or 7) __________ policy if they were aware of the regular price. Their preference for fairness is thus a factor that keeps the shop from increasing the price of umbrellas according to the weather, when rational behavior in traditional economic theory would warrant an increase. It is through such applications that behavioral economics has made economics as a whole more 8) ___________ and familiar. Richard Thaler had, as the Nobel committee put it, made economics more human. Behavioral economics, like any other, is not free of criticism — in this case, of being a patchwork of cognitive psychology and mathematics, with so many individual exceptions that it neither has the rigour of mathematics nor is free enough of modeling to be pure psychology. There are several psychologists and economists with whom Prof. Thaler has collaborated, including Amos Tversky and the 2002 Economics Nobel winner Daniel Kahneman. In a 2008 book Nudge, Prof. Thaler and Cass Sunstein show how behavioral economics can be used in policy-making to 9) _________ behaviors. It is here that they introduce the concept of libertarian paternalism, where “choice architects” influence the behavior of individuals to make their lives “longer, healthier and better” but in a way that gives individuals the freedom to not participate in arrangements that are not to their taste. And with governments slowly incorporating it into policy, behavioral economics has not been 10) _____ to campuses.
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Question 8
Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of societies, countries, corporations and the global macro economy itself are meant to fit certain models, at the heart of which are rational agents maximizing their utility or welfare. However, economic models are, to varying degrees, 2) __________ of the real world, ...
Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of societies, countries, corporations and the global macro economy itself are meant to fit certain models, at the heart of which are rational agents maximizing their utility or welfare. However, economic models are, to varying degrees, 2) __________ of the real world in which economic agents are all too often not rational. For decades, American economist Richard H. Thaler has studied how decision-making deviates from rational 3) __________ in the real world and how this can actually be incorporated into economic modeling. His analysis married economics to human psychology and his work has formed the core of the field of behavioral economics. It is for his 4) __________ contributions to this field that Prof. Thaler was awarded the Economics Nobel on Monday. The Royal Swedish Academy of Sciences cited his analysis of how decision-makers deviate systematically from rational behavior as conceived in traditional economic theory. For instance, individuals experience bounded rationality due to 5) ____________ limitations. Two, they have social preferences such as caring for others. And three, they sometimes lack self-control. These are situations that every individual can relate to. In explaining the relevance of Prof. Thaler’s work and their decision to award him the prize, the committee highlighted its everyday 6) ____________. Consider, for instance, the existence of social preferences. It would be rational for a shop to increase the price of umbrellas on a rainy day but customers would probably think of this as an unfair or 7) __________ policy if they were aware of the regular price. Their preference for fairness is thus a factor that keeps the shop from increasing the price of umbrellas according to the weather, when rational behavior in traditional economic theory would warrant an increase. It is through such applications that behavioral economics has made economics as a whole more 8) ___________ and familiar. Richard Thaler had, as the Nobel committee put it, made economics more human. Behavioral economics, like any other, is not free of criticism — in this case, of being a patchwork of cognitive psychology and mathematics, with so many individual exceptions that it neither has the rigour of mathematics nor is free enough of modeling to be pure psychology. There are several psychologists and economists with whom Prof. Thaler has collaborated, including Amos Tversky and the 2002 Economics Nobel winner Daniel Kahneman. In a 2008 book Nudge, Prof. Thaler and Cass Sunstein show how behavioral economics can be used in policy-making to 9) _________ behaviors. It is here that they introduce the concept of libertarian paternalism, where “choice architects” influence the behavior of individuals to make their lives “longer, healthier and better” but in a way that gives individuals the freedom to not participate in arrangements that are not to their taste. And with governments slowly incorporating it into policy, behavioral economics has not been 10) _____ to campuses.
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  • E
Question 9
Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of societies, countries, corporations and the global macro economy itself are meant to fit certain models, at the heart of which are rational agents maximizing their utility or welfare. However, economic models are, to varying degrees, 2) __________ of the real, ...
Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of societies, countries, corporations and the global macro economy itself are meant to fit certain models, at the heart of which are rational agents maximizing their utility or welfare. However, economic models are, to varying degrees, 2) __________ of the real world in which economic agents are all too often not rational. For decades, American economist Richard H. Thaler has studied how decision-making deviates from rational 3) __________ in the real world and how this can actually be incorporated into economic modeling. His analysis married economics to human psychology and his work has formed the core of the field of behavioral economics. It is for his 4) __________ contributions to this field that Prof. Thaler was awarded the Economics Nobel on Monday. The Royal Swedish Academy of Sciences cited his analysis of how decision-makers deviate systematically from rational behavior as conceived in traditional economic theory. For instance, individuals experience bounded rationality due to 5) ____________ limitations. Two, they have social preferences such as caring for others. And three, they sometimes lack self-control. These are situations that every individual can relate to. In explaining the relevance of Prof. Thaler’s work and their decision to award him the prize, the committee highlighted its everyday 6) ____________. Consider, for instance, the existence of social preferences. It would be rational for a shop to increase the price of umbrellas on a rainy day but customers would probably think of this as an unfair or 7) __________ policy if they were aware of the regular price. Their preference for fairness is thus a factor that keeps the shop from increasing the price of umbrellas according to the weather, when rational behavior in traditional economic theory would warrant an increase. It is through such applications that behavioral economics has made economics as a whole more 8) ___________ and familiar. Richard Thaler had, as the Nobel committee put it, made economics more human. Behavioral economics, like any other, is not free of criticism — in this case, of being a patchwork of cognitive psychology and mathematics, with so many individual exceptions that it neither has the rigour of mathematics nor is free enough of modeling to be pure psychology. There are several psychologists and economists with whom Prof. Thaler has collaborated, including Amos Tversky and the 2002 Economics Nobel winner Daniel Kahneman. In a 2008 book Nudge, Prof. Thaler and Cass Sunstein show how behavioral economics can be used in policy-making to 9) _________ behaviors. It is here that they introduce the concept of libertarian paternalism, where “choice architects” influence the behavior of individuals to make their lives “longer, healthier and better” but in a way that gives individuals the freedom to not participate in arrangements that are not to their taste. And with governments slowly incorporating it into policy, behavioral economics has not been 10) _____ to campuses.
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Question 10
Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of societies, countries, corporations and the global macro economy itself are meant to fit certain models, at the heart of which are rational agents maximizing their utility or welfare. However, economic models are, to varying degrees, 2) __________ of the real world, ...
Economics as a discipline is not 1) __________ accused of being fairly removed from reality. The activities of societies, countries, corporations and the global macro economy itself are meant to fit certain models, at the heart of which are rational agents maximizing their utility or welfare. However, economic models are, to varying degrees, 2) __________ of the real world in which economic agents are all too often not rational. For decades, American economist Richard H. Thaler has studied how decision-making deviates from rational 3) __________ in the real world and how this can actually be incorporated into economic modeling. His analysis married economics to human psychology and his work has formed the core of the field of behavioral economics. It is for his 4) __________ contributions to this field that Prof. Thaler was awarded the Economics Nobel on Monday. The Royal Swedish Academy of Sciences cited his analysis of how decision-makers deviate systematically from rational behavior as conceived in traditional economic theory. For instance, individuals experience bounded rationality due to 5) ____________ limitations. Two, they have social preferences such as caring for others. And three, they sometimes lack self-control. These are situations that every individual can relate to. In explaining the relevance of Prof. Thaler’s work and their decision to award him the prize, the committee highlighted its everyday 6) ____________. Consider, for instance, the existence of social preferences. It would be rational for a shop to increase the price of umbrellas on a rainy day but customers would probably think of this as an unfair or 7) __________ policy if they were aware of the regular price. Their preference for fairness is thus a factor that keeps the shop from increasing the price of umbrellas according to the weather, when rational behavior in traditional economic theory would warrant an increase. It is through such applications that behavioral economics has made economics as a whole more 8) ___________ and familiar. Richard Thaler had, as the Nobel committee put it, made economics more human. Behavioral economics, like any other, is not free of criticism — in this case, of being a patchwork of cognitive psychology and mathematics, with so many individual exceptions that it neither has the rigour of mathematics nor is free enough of modeling to be pure psychology. There are several psychologists and economists with whom Prof. Thaler has collaborated, including Amos Tversky and the 2002 Economics Nobel winner Daniel Kahneman. In a 2008 book Nudge, Prof. Thaler and Cass Sunstein show how behavioral economics can be used in policy-making to 9) _________ behaviors. It is here that they introduce the concept of libertarian paternalism, where “choice architects” influence the behavior of individuals to make their lives “longer, healthier and better” but in a way that gives individuals the freedom to not participate in arrangements that are not to their taste. And with governments slowly incorporating it into policy, behavioral economics has not been 10) _____ to campuses.
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