Read the excerpt from a behavioral economics journal carefully. Fill in the blanks based explicitly on the terminology and definitions provided by the author.
Answer:Within the field of behavioral economics, researchers increasingly recognize the phenomenon of *hyperbolic discounting*. Unlike traditional models which assume a constant rate of time preference, hyperbolic discounting describes a cognitive bias where individuals increasingly choose smaller, immediate rewards over larger, delayed rewards as the delay to the larger reward increases, but switch their preference to the larger reward when both are shifted equally further into the future. Thus, it is the disproportionate valuation of the immediate present that disrupts long-term utility maximization.
According to the passage, the author defines 【hyperbolic discounting】 as a cognitive bias in which individuals demonstrate a disproportionate preference for smaller, 【immediate】 rewards, although this preference reverses when both choices are delayed equally into the future.
According to the passage, the author defines 【hyperbolic discounting】 as a cognitive bias in which individuals demonstrate a disproportionate preference for smaller, 【immediate】 rewards, although this preference reverses when both choices are delayed equally into the future.
Answer
Blank 1 is 'hyperbolic discounting' and Blank 2 is 'immediate'.
The passage explicitly introduces 'hyperbolic discounting' as the term for a specific cognitive bias. The stipulative definition provided immediately afterward states that this bias involves choosing 'smaller, immediate rewards.' Therefore, the correct term for the first blank is 'hyperbolic discounting', and the specific type of reward favored in this bias (filling the second blank) is 'immediate'.
Step-by-Step Solution
Key Concept
Identifying explicitly defined specialized terminology and its textual parameters within a dense passage.