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A Behavioral Analysis Of Predatory Lending, Patricia A. Mccoy
A Behavioral Analysis Of Predatory Lending, Patricia A. Mccoy
Akron Law Review
This essay considers experimental evidence from behavioral economics can shed light on injured borrowers’ decisionmaking processes and the choice of legal redress. Specifically, I posit that predatory lenders exploit the behavioral principle of framing effects to manipulate homeowners’ otherwise strong aversion to losing their homes to foreclosure. Through clever marketing, distraction, and an often legal lack of transparency concerning the true risks involved, predatory lenders are able to divert the focus of homeowners from the fear of losing their homes to other fears, many of which are often conducive to less destructive solutions.
Superbias: The Collision Of Behavioral Economics And Implicit Social Cognition, Justin D. Levinson
Superbias: The Collision Of Behavioral Economics And Implicit Social Cognition, Justin D. Levinson
Akron Law Review
This Article explores what happens when behavioral law and economics and implicit social cognition collide, and presents an empirical study designed to test the hypothesis that racial stereotypes overpower behavioral economic phenomena...Section II details behavioral law and economics as well as implicit social cognition. It examines the social science basis of each field and explores the similar cognitive mechanics underlying them. Section III investigates what happens when race is introduced into economic decision-making and considers how racial stereotypes may specifically affect economic decisions already at risk of irrationality. Research has documented that economic decision-making is often discriminatory; new evidence suggests …