Recent research by Laibson and other economists recognizes the importance of incorporating _____ effects into the study of consumer behavior.

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The question asks about recent research by Laibson and other economists, focusing on what effects should be incorporated into the study of consumer behavior.
Option a: 'technological' effects. While technology can influence consumption, Laibson and contemporaries emphasize behavioral factors, time-inconsistency, self-control, and psychology rather than technology as the primary lens. This makes the technological framing less central to their standard argument.
Option b: 'psychological' effects. This aligns with Laibson’s work on behavioral economics, including heuristics, biases, self-control, and how expectancies and mental accounting shape choices. The psychological lens is a core element in integrating realism about human behavior into economic models, making this option well grounded in the literature.
Option c: 'environmental' effects. Environmental considerations can influence demand (e.g., climate policy, social norms), but in the context of Laibson’s notable contributions, the focus is more on cognitive and behavioral processes rather than environmental determinants as the foundational study object. This makes environmental effects a less precise fit here.
Option d: 'meteorological' effects. Meteorology has little direct role in standard consumer-behavior models in this line of research; day-to-day weather variations generally do not constitute a central theoretical driver of consumer choice in the cited work. This option is not a reasonable match.
In summary, among the choices, the psychological perspective best captures the emphasis of Laibson and related economists on how cognitive processes, biases, and self-control shape consumption decisions, rather than attributing behavior primarily to technology, environment, or weather factors.

105A Ch 20 (Consumption) Homework

Recent research by Laibson and other economists recognizes the importance of incorporating _____ effects into the study of consumer behavior.

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