Set 1: Inferences (Advanced)
Explanation
PASSAGE
Game theory models assume rational actors who maximize utility, yet experimental economics consistently finds that people cooperate more, punish unfairness more, and act altruistically more than these models predict. Behavioral economists have proposed modified theories incorporating concepts like 'fairness preferences' and 'bounded rationality.'
What does the passage suggest about theoretical modeling?
Detailed Explanation
This question asks you to draw a logical conclusion from the text. Models assume X; experiments find otherwise → 'modified theories' = data driving revision. A valid inference must be supported by evidence in the passage, even if not stated directly. Look for clues in the text that strongly suggest the answer. Avoid conclusions that require assumptions beyond what's written. Valid inferences are strongly supported by multiple pieces of evidence in the text. Be cautious of choices that go too far beyond what the passage actually states. The best inference is the one most directly supported by textual evidence.
Key Evidence:
• "consistently finds that people... more than models predict"
• "proposed modified theories"
Why others are wrong: A (People cooperate and act altruistically.), B (Predictions are consistently contradicted.), C (Modified theories are 'proposed' = accepted framework.).