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Misbehavioral Law And Economics, Jacob Hale Russell
Misbehavioral Law And Economics, Jacob Hale Russell
University of Michigan Journal of Law Reform
Many legal rules—ranging from common-law contract doctrines to modern consumer protection regulations—are designed to protect individuals from their own mistakes. But scholars have neglected a core difficulty facing such policies: we humans are a motley bunch, and we are defined in part by our idiosyncrasies. As a result, one person’s mistake is another’s ideal choice. Making matters worse, it is hard to observe when a policy response misfires. If cognitive errors and psychological biases are as prevalent as current research suggests, then we have no reliable way of knowing consumers’ true preferences. So are we always faced with a dilemma, …
Regret Theory - Explanation, Evaluation And Implications For The Law, Grant B. Gelberg
Regret Theory - Explanation, Evaluation And Implications For The Law, Grant B. Gelberg
University of Michigan Journal of Law Reform
This Note discusses regret theory, which offers an alternative explanation of rational behavior in risky or uncertain situations. Unlike traditional law and economics, which is based on expected utility theory, regret theory posits that individuals either rejoice or experience regret after making a decision, and that the anticipation of these feelings influences choices ex ante. In recent years, studies have shown the robustness of regret theory, particularly when individuals compare action to inaction, in disparate feedback environments, and when decisional agency is altered. These, and other factors, influence regret theory's impact on litigant behavior, as well as on the …