Behavioral Law and Economics

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Cass R. Sunstein
Cambridge University Press, Mar 28, 2000 - Business & Economics - 431 pages
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This exciting volume marks the birth of a new field--a field that studies law with reference to an accurate, rather than a crude, understanding of human behavior. Behavioral Law and Economics presents new findings in cognitive psychology and behavioral economics, which show that people are frequently both unselfish and over-optimistic; that people have limited willpower and limited self-control; and that people are "boundedly" rational, in the sense that they have limited information-processing powers, and frequently rely on mental short-cuts and rules of thumb. Understanding this kind of human behavior has large-scale implications for the analysis of law, in areas including environmental protection, taxation and tax compliance, constitutional law, voting behavior, punitive damages for civil rights violations, labor negotiations and strikes, and corporate finance. Behavioral Law and Economics offers many new insights into these fields and suggestions for legal reform. With a better knowledge of human behavior, it is possible to predict the actual effects of law, to see how law might actually promote society's goals, and to reassess the questions of what law should be doing.
 

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Contents

A Behavioral Approach to Law and Economics
13
Heuristics and Biases Shortcuts Errors and Legal Decisions
59
ContextDependence in Legal Decision Making
61
A Positive Psychological Theory of Judging in Hindsight
95
Behavioral Economics Contract Formation and Contract Law
116
Organized Illusions A Behavioral Theory of Why Corporations Mislead Stock Market Investors and Cause Other Social Harms
144
Reluctance to Vaccinate Omission Bias and Ambiguity
168
SecondOrder Decisions
187
Framing the Jury Cognitive Perspective on Pain and Suffering Awards
259
Behavioral Economic Analysis of Redistributive Legal Rules
288
Do Parties to Nuisance Cases Bargain After Judgment? A Glimpse Inside the Cathedral
302
The Demand for Law Why Law Is As It Is
323
Some Implications of Cognitive Psychology for Risk Regulation
325
Explaining Bargaining Impasse The Role of Selfserving Biases
355
Controlling Availability Cascades
374
Cognitive Theory and Tax
398

Valuation Values and Dollars in the Legal System
209
Experimental Tests of the Endowment Effect and the Coase Theorem
211
Assessing Punitive Damages With Notes on Cognition and Valuation in Law
232

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About the author (2000)

Cass R. Sunstein is a law professor at Harvard Law School and is the most cited law professor in the United States.

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