Abstract
Skeptics of rational choice theory have long predicted that behavioral economics would radically transform the legislation, adjudication, and analysis of law. Using tort law as an exemplar, this Article maps out the narrow set of conditions where substantive law can be modified to accommodate irrational decision-makers. Specifically, this Article demonstrates that if injurers are systematically biased, and the due care standard can be expressed quantitatively, and victims are unable to take meaningful precautions, then imposing punitive damages can induce irrational injurers to exercise efficient precautionary care. In all other cases, it is better that the law adopt a presumption of rationality, regardless whether individuals behave rationally in fact.
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© 2021 Walter de Gruyter GmbH, Berlin/Boston
Articles in the same Issue
- Frontmatter
- Article
- The Impact of Behavioral Economics on the Law: Introduction
- Special Issue Articles
- The Paternalistic Turn in Behavioral Law and Economics: A Critique
- Behavioral Contract Law
- The Limits of Behavioral Economics in Tort Law
- Behavioral Economics in Plea-Bargain Decision-Making: Beyond the Shadow-of-Trial Model
- Behavioral Economics and Court Decision-Making
- The Role of Bias in Economic Models of Law
- Behavioral Biases and the Law
- The Evolutionary Force of Behavioral Economics in Law
Articles in the same Issue
- Frontmatter
- Article
- The Impact of Behavioral Economics on the Law: Introduction
- Special Issue Articles
- The Paternalistic Turn in Behavioral Law and Economics: A Critique
- Behavioral Contract Law
- The Limits of Behavioral Economics in Tort Law
- Behavioral Economics in Plea-Bargain Decision-Making: Beyond the Shadow-of-Trial Model
- Behavioral Economics and Court Decision-Making
- The Role of Bias in Economic Models of Law
- Behavioral Biases and the Law
- The Evolutionary Force of Behavioral Economics in Law