Law Commons^™

How Gender And Other Identity Factors Influence Attitudes Toward Will Making: Lessons From Australia, Bridget J. Crawford, Tina Cockburn, Kelly Purser, Ho Fai Chan, Stephen Whyte, Uwe Dulleck

ACTEC Law Journal

This essay aims to stimulate interest in further empirical study of attitudes toward will making by reporting the results of a 2022 survey conducted in Australia of the general population (n=1202) and legal professionals (n=112). We asked participants for their views about the ideal age at which to begin the will-making process and the relative contributions of the client and attorney to any resulting will. There was a discernible gender-based difference in views on both questions. Women preferred to initiate those conversations approximately six years earlier than men did and, especially at earlier life stages, preferred less professional input into …

The Private Costs Of Behavioral Interventions, Avishalom Tor

Journal Articles

The increasing popularity of behavioral interventions—also known as nudges—is largely due to their perceived potential to promote public and private welfare at dramatically lower costs than those of traditional regulatory instruments, such as mandates or taxes. Yet, though nudges typically involve low implementation costs, scholars and policymakers alike tend to underestimate their often-substantial private costs. Once these costs are accounted for, most nudges turn out to generate significantly lower net benefits than assumed, and some prove less efficient or less cost-effective than traditional instruments. At other times, the private costs of behavioral interventions are sufficiently large to render them socially …

Climate Choice Architecture, Felix Mormann

Faculty Scholarship

Personal choices drive global warming nearly as much as institutional decisions. Yet, policymakers overwhelmingly target large-scale industrial facilities for reductions in carbon emissions, with individual and household emissions a mere afterthought. Recent advances in behavioral economics, cognitive psychology, and related fields have produced a veritable behavior change revolution. Subtle changes to the choice environment, or nudges, have improved stake-holder decision-making in a wide range of contexts, from healthier food choices to better retirement planning. But the vast potential of choice architecture remains largely untapped for purposes of climate policy and action. This Article explores that untapped potential and makes the …

Amazon's Pricing Paradox, Rory Van Loo, Nikita Aggarwal

Faculty Scholarship

Antitrust scholars have widely debated the apparent paradox of Amazon seemingly wielding monopoly power while offering low prices to consumers. A single company’s behavior thereby helped spark an intellectual renaissance as scholars debated why Amazon’s prices were so low, whether antitrust enforcers should intervene, and, eventually, how the field should be reformed for the era of large online platforms. One of the few things that all parties have agreed upon amidst those contentious conversations is that Amazon offers low prices. This Article challenges that assumption by demonstrating that Amazon charges higher prices than commonly understood. More importantly, unraveling the disconnect …

Private Environmental Nudges, Anthony Moffa

Faculty Publications

Environmentalist outcry against single-use plastics has rapidly translated into municipal and state policy. Bans and taxes on plastic bags, and, to a lesser extent, polices targeting plastic food/drink containers and plastic straws, have popped up all over the country. Many large national corporations, including Starbucks, Disney, and Hyatt to name a few, have also taken steps to reduce the amount of single-use plastics that their customers add to the waste stream.

Two ongoing discussions in the environmental law scholarship parallel these innovations in policy. The first re-examines the proper role for subnational governments in environmental policymaking, reviving a debate about …

Price Gouging In A Pandemic, Christopher Buccafusco, Daniel Hemel, Eric L. Talley

Faculty Scholarship

The COVID-19 pandemic led to acute supply shortages across the country as well as concerns over price increases amid surging demand. In the process, it reawakened a debate about whether and how to regulate “price gouging” — a controversy that continues as inflation has accelerated even as the pandemic abates. Animating this debate is a longstanding conflict between laissez-faire economics, which champions price fluctuations as a means to allocate scarce goods, and perceived norms of consumer fairness, which are thought to cut strongly against sharp price hikes amid shortages.

This Article provides a new, empirically grounded perspective on the price …

Terrified By Technology: How Systemic Bias Distorts U.S. Legal And Regulatory Responses To Emerging Technology, Steve Calandrillo, Nolan Kobuke Anderson

Articles

Americans are becoming increasingly aware of the systemic biases we possess and how those biases preclude us from collectively living out the true meaning of our national creed. But to fully understand systemic bias we must acknowledge that it is pervasive and extends beyond the contexts of race, privilege, and economic status. Understanding all forms of systemic bias helps us to better understand ourselves and our shortcomings. At first glance, a human bias against emerging technology caused by systemic risk misperception might seem uninteresting or unimportant. But this Article demonstrates how the presence of systemic bias anywhere, even in an …

Addictive Technology And Its Implications For Antitrust Enforcement, James Niels Rosenquist, Fiona M. Scott Morton, Samuel N. Weinstein

Articles

The advent of mobile devices and digital media platforms in the past decade represents the biggest shock to cognition in human history. Robust medical evidence is emerging that digital media platforms are addictive and, when used in excess, harmful to users’ mental health. Other types of addictive products, like tobacco and prescription drugs, are heavily regulated to protect consumers. Currently, there is no regulatory structure protecting digital media users from these harms. Antitrust enforcement and regulation that lowers entry barriers could help consumers of social media by increasing competition. Economic theory tells us that more choice in digital media will …

Corporate Law For Good People, Yuval Feldman, Adi Libson, Gideon Parchomovsky

Northwestern University Law Review

This Article offers a novel analysis of the field of corporate governance by viewing it through the lens of behavioral ethics. It calls for both shifting the focus of corporate governance to a new set of loci of potential corporate wrongdoing and adding new tools to the corporate governance arsenal. Behavioral ethics scholarship emphasizes that the large share of wrongdoing is generated by “good people” whose intention is to act ethically. Their wrongdoing stems from “bounded ethicality”—various cognitive and motivational limitations in their ethical decision-making processes—that leads to biased decisions that seem legitimate. Bounded ethicality has important implications for a …

Race, Dignity, And Commerce, Lu-In Wang

Articles

This Essay was written at the invitation of the Journal of Law and Commerce to contribute a piece on racism and commerce—an invitation that was welcome and well timed. It arrived as renewed attention was focused on racialized policing following the killing of George Floyd and in the midst of the worsening pandemic that highlighted unrelenting racial, social, and economic inequities in our society.

The connections between racism and commerce are potentially numerous, but the relationship between discriminatory policing and commerce might not be apparent. This Essay links them through the concept of dignity. Legal scholar John Felipe Acevedo has …

Corporate Law For Good People, Yuval Feldman, Adi Libson, Gideon Parchomovsky

All Faculty Scholarship

This article offers a novel analysis of the field of corporate governance by viewing it through the lens of behavioral ethics. It calls for both shifting the focus of corporate governance to a new set of loci of potential corporate wrongdoing and adding new tools to the corporate governance arsenal. The behavioral ethics scholarship emphasizes the large share of wrongdoing generated by "good people" whose intention is to act ethically. Their wrongdoing stems from "bounded ethicality" -- various cognitive and motivational processes that lead to biased decisions that seem legitimate. In the legal domain, corporate law provides the most fertile …

Affording Obamacare, Isaac ("Zack") D. Buck

Scholarly Works

As it approaches its tenth birthday, the Patient Protection and Affordable Care Act (ACA) is devolving. Intended to solve problems that had vexed American health care for generations, the ACA built a comprehensive structure by providing more Americans with accessible health insurance, reordering the private insurance market, expanding and reconfiguring Medicaid, and installing rational incentives into America’s health care enterprise. Without question, it was the most important piece of health care legislation since the mid-1960s, and it brought about positive change for millions of Americans.

However, over its short lifespan, the ACA has faced persistent practical, popular, and policy-based challenges. …

Predicting Variation In Endowment Effect Magnitudes, Owen D. Jones, C. Jaeger, S. Brosnan, D. Levin

Vanderbilt Law School Faculty Publications

Hundreds of studies demonstrate human cognitive biases that are both inconsistent with “rational” decisionmaking and puzzlingly patterned. One such bias, the “endowment effect” (also known as “reluctance to trade”), occurs when people instantly value an item they have just acquired at a much higher price than the maximum they would have paid to acquire it. This bias impedes a vast range of real-world transactions, making it important to understand. Prior studies have documented items that do or do not generate endowment effects, and have noted that the effects vary in magnitude. But none has predicted any of the substantial between-item …

Law And Economics Versus Economic Analysis Of Law, Keith N. Hylton

Faculty Scholarship

I agree with Calabresi's general distinction between Economic Analysis of Law and Law and Economics. However, these broad categories may obscure important differences between types of law and economics scholarship. I would distinguish positive economic analysis from normative economic analysis, and positivist legal analysis from nonpositivist analysis. The four categories generated by these distinctions provide a more fine-grained map of the styles of reasoning in law and economics, and has implications for the future of law and economics.

Time-Shifted Rationality And The Law Of Law's Leverage: Behavioral Economics Meets Behavioral Biology, Owen D. Jones

Owen Jones

A flood of recent scholarship explores legal implications of seemingly irrational behaviors by invoking cognitive psychology and notions of bounded rationality. In this article, I argue that advances in behavioral biology have largely overtaken existing notions of bounded rationality, revealing them to be misleadingly imprecise - and rooted in outdated assumptions that are not only demonstrably wrong, but also wrong in ways that have material implications for subsequent legal conclusions. This can be remedied. Specifically, I argue that behavioral biology offers three things of immediate use. First, behavioral biology can lay a foundation for both revising bounded rationality and fashioning …

Endowment Effects In Chimpanzees, Owen D. Jones, Sarah F. Brosnan, Susan P. Lambeth, Mary Catherine Mareno, Amanda S. Richardson, Steven Schapiro

Owen Jones

Human behavior is not always consistent with standard rational choice predictions. The much-investigated variety of apparent deviations from rational choice predictions provides a promising arena for the merger of economics and biology. Although little is known about the extent to which other species also exhibit these seemingly irrational patterns of human decision-making and choice behavior, similarities across species would suggest a common evolutionary root to the phenomena.

The present study investigated whether chimpanzees exhibit an endowment effect, a seemingly paradoxical behavior in which humans tend to value a good they have just come to possess more than they would have …

Law, Biology, And Property: A New Theory Of The Endowment Effect, Owen D. Jones, Sarah F. Brosnan

Owen Jones

Recent work at the intersection of law and behavioral biology has suggested numerous contexts in which legal thinking could benefit by integrating knowledge from behavioral biology. In one of those contexts, behavioral biology may help to provide theoretical foundation for, and potentially increased predictive power concerning, various psychological traits relevant to law. This Article describes an experiment that explores that context.

The paradoxical psychological bias known as the endowment effect puzzles economists, skews market behavior, impedes efficient exchange of goods and rights, and thereby poses important problems for law. Although the effect is known to vary widely, there are at …

Law And Behavioral Biology, Owen D. Jones, Timothy H. Goldsmith

Owen Jones

Society uses law to encourage people to behave differently than they would behave in the absence of law. This fundamental purpose makes law highly dependent on sound understandings of the multiple causes of human behavior. The better those understandings, the better law can achieve social goals with legal tools. In this Article, Professors Jones and Goldsmith argue that many long held understandings about where behavior comes from are rapidly obsolescing as a consequence of developments in the various fields constituting behavioral biology. By helping to refine law's understandings of behavior's causes, they argue, behavioral biology can help to improve law's …

Dignity Transacted, Lu-In Wang, Zachary W. Brewster

Articles

In interactive customer service encounters, the dignity of the parties becomes the currency of a commercial transaction. Service firms that profit from customer satisfaction place great emphasis on emotional labor, the work that service providers do to make customers feel cared for and esteemed. But performing emotional labor can deny dignity to workers, by highlighting their subservience and requiring them to suppress their own emotions in an effort to elevate the status and experiences of their customers. Paradoxically, the burden of performing emotional labor may also impose transactional costs on some customers by facilitating discrimination in service delivery. Drawing on …

Behavioral Public Choice And The Law, Gary M. Lucas Jr., Slavisa Tasic

Gary M. Lucas Jr.

No abstract provided.

Beyond Individualism In Law And Economics, Robert B. Ahdieh

Robert B. Ahdieh

The study of law and economics was built upon two pillars. The first is the familiar assumption of individual rationality. The second, less familiar, is the principle of methodological individualism. Over the last twenty years, law and economics has largely internalized behavioral critiques of the rationality assumption. By contrast, the field has failed to appreciate the implications of growing challenges to its methodological individualism. Where social norms shape individual choices, network externalities are strong, coordination is the operative goal, or information is a substantial determinant of value, a methodology strongly oriented to the analysis of individuals overlooks at least as …

The Psychology Of Patent Protection, Stephanie Plamondon Bair

Stephanie Bair

This Article offers the first comprehensive assessment of the major justifications for our patent system using a behavioral psychology framework. Applying insights from the behavioral literature that I argue more accurately account for the realities of human action than previous analytical tools, I critically evaluate each of the major justifications for patents — incentive theory, disclosure theory, prospect theory, commercialization theory, patent racing theory, and non-utilitarian theories. I ask whether our current patent system is an effective regime for meeting the stated goals of these accounts. When the answer to this question is no, I again turn to the behavioral …

Economic Individualism And Preference Formation, Andrzej Rapaczynski

Faculty Scholarship

This note examines some issues involved in an attempt to go beyond the assumption, long-made by most economists, that people’s preferences are simply to be treated as “given” and that the principle of consumer sovereignty entails a refusal to consider some (or some people’s) revealed preferences as more authoritative than others. The most important break with that assumption has been the development of behavioral economics, which shows that people may not always know what they really want, and that economists have to develop a more critical approach, distinguishing people’s true preferences from those that are merely apparent. While this approach, …

Nudges For Health Policy: Effectiveness And Limitations, Victoria A. Shaffer

Missouri Law Review

One tool that our government can use to combat our healthcare challenges is the use of health policy in the form of programs, regulations, and agencies that are aimed at improving the overall health and welfare of Americans. Of the various approaches to shaping health policy, this paper will focus on the use of “nudges,” a behavioral strategy for shaping human behavior from the framework, Libertarian Paternalism. In this Article, a nudge is defined as any aspect of choice architecture or any method of structuring the choice environment that influences behavior in a predictable way, with the restriction that this …

Behavioral Economics Goes To Court: The Fundamental Flaws In The Behavioral Law & Economics Arguments Against No-Surcharge Laws, Todd J. Zywicki, Geoffrey A. Manne, Kristian Stout

Missouri Law Review

During the past decade, academics – predominantly scholars of behavioral law and economics – have increasingly turned to the claimed insights of behavioral economics in order to craft novel policy proposals in many fields, most significantly consumer credit regulation. Over the same period, these ideas have also gained traction with policymakers, resulting in a variety of legislative efforts, such as the creation of the Consumer Financial Protection Bureau. Most recently, the efforts of behavioral law and economics scholars have been directed toward challenging a number of state laws that regulate retailers’ use of surcharge fees for consumer credit card payments. …

Facilitating Competition By Remedial Regulation, Kristelia A. García

Publications

In music licensing, powerful music publishers have begun—for the first time ever— to withdraw their digital copyrights from the collectives that license those rights, in order to negotiate considerably higher rates in private deals. At the beginning of the year, two of these publishers commanded a private royalty rate nearly twice that of the going collective rate. This result could be seen as a coup for the free market: Constrained by consent decrees and conflicting interests, collectives are simply not able to establish and enforce a true market rate in the new, digital age. This could also be seen as …

The Corporation As Courthouse, Rory Van Loo

Faculty Scholarship

Despite the considerable attention paid to mandatory arbitration, few consumer disputes ever reach arbitration. By contrast, institutions such as Apple’s customer service department handle hundreds of millions of disputes annually. This Article argues that understanding businesses’ internal dispute processes is crucial to diagnosing consumers’ procedural needs. Moreover, businesses’ internal processes interact with a larger system of private actors. These actors include ratings websites that mete out reputational sanctions. The system also includes other corporations linked to the transaction, such as when American Express adjudicates a contested sale between a shopper and Home Depot. This vast private order offers promise to …

From Promise To Form: How Contracting Online Changes Consumers, David A. Hoffman

All Faculty Scholarship

I hypothesize that different experiences with online contracting have led some consumers to see contracts—both online and offline—in distinctive ways. Experimenting on a large, nationally representative sample, this paper provides evidence of age-based and experience-based differences in views of consumer contract formation and breach. I show that younger subjects who have entered into more online contracts are likelier than older ones to think that contracts can be formed online, that digital contracts are legitimate while oral contracts are not, and that contract law is unforgiving of breach.

I argue that such individual differences in views of contract formation and enforceability …

The Psychology Of Patent Protection, Stephanie Plamondon Bair

Faculty Scholarship

This Article offers the first comprehensive assessment of the major justifications for our patent system using a behavioral psychology framework. Applying insights from the behavioral literature that I argue more accurately account for the realities of human action than previous analytical tools, I critically evaluate each of the major justifications for patents — incentive theory, disclosure theory, prospect theory, commercialization theory, patent racing theory, and non-utilitarian theories. I ask whether our current patent system is an effective regime for meeting the stated goals of these accounts. When the answer to this question is no, I again turn to the behavioral …

Mandatory Process, Matthew J.B. Lawrence

Indiana Law Journal

This Article suggests that people tend to undervalue their procedural rights—their proverbial “day in court”—until they are actually involved in a dispute. The Article argues that the inherent, outcome-independent value of participating in a dispute resolution process comes largely from its power to soothe a person’s grievance— their perception of unfairness and accompanying negative emotional reaction—win or lose. But a tendency to assume unchanging emotional states, known in behavioral economics as projection bias, can prevent people from anticipating that they might become aggrieved and from appreciating the grievance-soothing power of process. When this happens, people will waive their procedural rights …