Behavioral Law & Economics

The rational utility-maximizer characterizes much of the discussion of economic analysis of law. In recent years the assumption of rationality is being challenged. Some people dispute the view that individuals are indeed rational and that rationality alone can explain behaviour. Others aim to increase the explanatory power of economics by using insights from the field of psychology. After we present the assumption of rationality and its role in different contexts we turn to examine both the cognitive limitations of individuals, the implications that these cognitive limitations have for legal analysis and the ways psychological findings can complement the assumption of rationality. We establish that scholars, judges, legislators and bureaucrats can use behavioral economics to explain both the effects and content of laws. Examples include attitudes towards risk, framing effects, endowment effects, dispositions toward fairness and others.

Class Details

Meeting Days Time Location
Wednesday, Thursday, Friday 10:30 - 11:20 am TNH 3.128
Evaluation Method Date Time Alpha Range Room

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Harel, Alon Harel, Alon