Law and Economics Commons^™

The Law And Economics Of Behavioral Regulation, Avishalom Tor

Journal Articles

This article examines the law and economics of behavioral regulation (“nudging”), which governments and organizations increasingly use to substitute for and complement traditional instruments. To advance its welfare-based assessment, Section 1 examines alternative nudging definitions and Section 2 considers competing nudges taxonomies. Section 3 describes the benefits of nudges and their regulatory appeal, while Section 4 considers their myriad costs—most notably the private costs they generate for their targets and other market participants. Section 5 then illustrates the assessment of public and private welfare nudges using cost-benefit analysis, cost-effectiveness analysis, and rationality-effects analysis.

Insurer Moral Hazard In The Workers' Compensation Crisis: Reforming Cost Inflation, Not Rate Suppression, Martha T. Mccluskey

Journal Articles

This article challenges the standard story of the insurance crisis that led to the near-collapse and major reform of a number of states’ workers’ compensation programs in the 1980s and 1990s.

In the prevailing account, insurance costs rose due to expanding costs of benefits for injured workers’, much of which was blamed on wasteful or abusive "moral hazard" by workers and their lawyers and doctors. Because state regulators had substantial power to control insurance rates, this account claims governments tried to suppress prices in the face of rising benefit costs in a misguided attempt to avoid political trade-offs between labor …