Open Access. Powered by Scholars. Published by Universities.®

Law Commons

Open Access. Powered by Scholars. Published by Universities.®

Articles 1 - 30 of 33

Full-Text Articles in Law

Race, Dignity, And Commerce, Lu-In Wang Jan 2021

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 ...


Corporate Law For Good People, Yuval Feldman, Adi Libson, Gideon Parchomovsky Jan 2021

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

Faculty Scholarship at Penn Law

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 ground ...


Price Gouging In A Pandemic, Christopher Buccafusco, Daniel Jacob Hemel, Eric L. Talley Jan 2021

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

Faculty Scholarship

The ongoing Covid-19 pandemic has led to acute supply shortages across the country as well as concerns over price increases amid surging demand. In the process, it has reawakened a debate about whether and how to regulate “price gouging.” Animating this controversy 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 gouging debate that challenges several aspects of conventional wisdom. We report ...


Time-Shifted Rationality And The Law Of Law's Leverage: Behavioral Economics Meets Behavioral Biology, Owen D. Jones Apr 2019

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 a ...


Endowment Effects In Chimpanzees, Owen D. Jones, Sarah F. Brosnan, Susan P. Lambeth, Mary Catherine Mareno, Amanda S. Richardson, Steven Schapiro Apr 2019

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 Apr 2019

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 Apr 2019

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 ...


From Promise To Form: How Contracting Online Changes Consumers, David A. Hoffman Jan 2016

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

Faculty Scholarship at Penn Law

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 ...


Mandatory Process, Matthew J.B. Lawrence Oct 2015

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 ...


Allowing Patients To Waive The Right To Sue For Medical Malpractice: A Response To Thaler And Sunstein, Tom Baker, Timothy D. Lytton Jun 2015

Allowing Patients To Waive The Right To Sue For Medical Malpractice: A Response To Thaler And Sunstein, Tom Baker, Timothy D. Lytton

Timothy D. Lytton

This essay critically evaluates Richard Thaler and Cass Sunstein’s proposal to allow patients to prospectively waive their rights to bring a malpractice claim, presented in their recent, much acclaimed book, Nudge: Improving Decisions about Health, Wealth and Happiness. We show that the behavioral insights that undergird Nudge do not support the waiver proposal. In addition, we demonstrate that Thaler and Sunstein have not provided a persuasive cost-benefit justification for the proposal. Finally, we argue that their liberty-based defense of waivers rests on misleading analogies and polemical rhetoric that ignore the liberty and other interests served by patients’ tort law ...


A Psychological Account Of Consent To Fine Print, Tess Wilkinson-Ryan May 2014

A Psychological Account Of Consent To Fine Print, Tess Wilkinson-Ryan

Faculty Scholarship at Penn Law

The moral and social norms that bear on contracts of adhesion suggest a deep ambivalence. Contracts are perceived as serious moral obligations, and yet they must be taken lightly or everyday commerce would be impossible. Most people see consent to boilerplate as less meaningful than consent to negotiated terms, but they nonetheless would hold consumers strictly liable for both. This Essay aims to unpack the beliefs, preferences, assumptions, and biases that constitute our assessments of assent to boilerplate. Research suggests that misgivings about procedural defects in consumer contracting weigh heavily on judgments of contract formation, but play almost no role ...


Demand For Breach, Tess Wilkinson-Ryan Apr 2014

Demand For Breach, Tess Wilkinson-Ryan

Faculty Scholarship at Penn Law

These studies elicit behavioral evidence for how people weigh monetary and non-monetary incentives in efficient breach. Study 1 is an experimental game designed to capture the salient features of the efficient breach decision. Subjects in a behavioral lab were offered different amounts of money to break the deal they had made with a partner. 18.6% of participants indicated willingness to break a deal for any amount of profit, 27.9% were unwilling to breach for the highest payout, and the remaining subjects identified a break-point in between. Study 2 is an online questionnaire asking subjects to take the perspectives ...


Behavioral International Law, Tomer Broude Feb 2014

Behavioral International Law, Tomer Broude

Tomer Broude

Economic analysis and rational choice have in the last decade made significant inroads into the study of international law and institutions, relying upon standard assumptions of perfect rationality of states and decision-makers. This approach is inadequate, both empirically and in its tendency towards outdated formulations of political theory. This article presents an alternative behavioral approach that provides new hypotheses addressing problems in international law while introducing empirically grounded concepts of real, observed rationality. First, I address methodological objections to behavioral analysis of international law: the focus of behavioral research on the individual; the empirical foundations of behavioral economics; and behavioral ...


In Search Of Effective Ethics & Compliance Programs, Maurice E. Stucke Feb 2014

In Search Of Effective Ethics & Compliance Programs, Maurice E. Stucke

Maurice E Stucke

The U.S. Sentencing Commission’s Organizational Guidelines for over twenty years have offered firms a significant financial incentive to develop an ethical organizational culture. Nonetheless, corporate crime persists. Too many ethics programs remain ineffective. As this Article explores, the Guidelines' current approach is not working. The evidence, including sentencing data over the past twenty years, reveals that few firms have effective ethics and compliance programs. Nor is there much hope that the Guidelines' incentive will induce companies, after the economic crisis, to become more ethical. The problem is not attributable to three assumptions underlying the Guidelines. The empirical research ...


"Nudging" Better Lawyer Behavior: Using Default Rules And Incentives To Change Behavior In Law Firms, Nancy B. Rapoport Jan 2014

"Nudging" Better Lawyer Behavior: Using Default Rules And Incentives To Change Behavior In Law Firms, Nancy B. Rapoport

Scholarly Works

This article examines how incentives in law firms can affect lawyer behavior and suggests some possible changes to incentive structures and default rules that might improve the ethical behavior of lawyers.

In the changing landscape of law practice — where law firm profits are threatened by such changes as increased pressure from clients to economize and the concomitant opportunities for clients to shop around for the most efficient lawyers — are there ways to change how things are done in law firms so that firms can provide more efficient and ethical service? This article suggests that an understanding of cognitive biases and ...


Are Individuals Fickle-Minded?, Mathew D. Mccubbins, Mark Turner Jan 2014

Are Individuals Fickle-Minded?, Mathew D. Mccubbins, Mark Turner

Faculty Scholarship

Game theory has been used to model large-scale social events — such as constitutional law, democratic stability, standard setting, gender roles, social movements, communication, markets, the selection of officials by means of elections, coalition formation, resource allocation, distribution of goods, and war — as the aggregate result of individual choices in interdependent decision-making. Game theory in this way assumes methodological individualism. The widespread observation that game theory predictions do not in general match observation has led to many attempts to repair game theory by creating behavioral game theory, which adds corrective terms to the game theoretic predictions in the hope of making ...


Rethinking Summary Judgment Empirics: The Life Of The Parties, Jonah B. Gelbach Jan 2014

Rethinking Summary Judgment Empirics: The Life Of The Parties, Jonah B. Gelbach

Faculty Scholarship at Penn Law

No abstract provided.


A Market For Tax Compliance, Walter E. Afield Iii Aug 2013

A Market For Tax Compliance, Walter E. Afield Iii

Walter E Afield III

It is becoming increasingly clear that, due to political realities and budgetary constraints, the IRS is going to have to attempt to enforce the tax laws by doing more with less. Current enforcement efforts have yielded a tax gap (i.e., the difference between the amount of taxes that should be paid and the amount that are collected) of roughly $450 billion annually. Faced with this task, one of the steps that the IRS has recently taken is to try to improve the quality in services performed by paid tax preparers, a group that historically has been subject to little ...


Copyright Freeconomics, John M. Newman Feb 2013

Copyright Freeconomics, John M. Newman

John M. Newman

Innovation has wreaked creative destruction on traditional content platforms. During the decade following Napster’s rise and fall, industry organizations launched litigation campaigns to combat the dramatic downward pricing pressure created by the advent of zero-price, copyright-infringing content. These campaigns attracted a torrent of debate, still ongoing, among scholars and stakeholders—but this debate has missed the forest for the trees. Industry organizations have abandoned litigation efforts, and many copyright owners now compete directly with infringing products by offering licit content at a price of $0.

This sea change has ushered in an era of “copyright freeconomics.” Drawing on an ...


Can We Build Behavioral Game Theory?, Gale M. Lucas, Mathew D. Mccubbins, Mark Turner Jan 2013

Can We Build Behavioral Game Theory?, Gale M. Lucas, Mathew D. Mccubbins, Mark Turner

Faculty Scholarship

The way economists and other social scientists model how people make interdependent decisions is through the theory of games. Psychologists and behavioral economists, however, have established many deviations from the predictions of game theory. In response to these findings, a broad movement has arisen to salvage the core of game theory. Extant models of interdependent decision-making try to improve their explanatory domain by adding some corrective terms or limits. We will make the argument that this approach is misguided. For this approach to work, the deviations would have to be consistent. Drawing in part on our experimental results, we will ...


Carrots, Sticks, And Salience, Brian Galle Jan 2013

Carrots, Sticks, And Salience, Brian Galle

Georgetown Law Faculty Publications and Other Works

This Article considers the second-best design of Pigouvian taxes and subsidies in the presence of agents who are imperfectly aware of the instrument. Until very recently, the price instrument literature has assumed perfect rationality, and even the handful of prior attempts to account for “hidden” prices focus mainly on the income tax. I extend these efforts in several directions. First, I show that the best available instrument for correcting negative externalities is often one whose price is partially adjusted upwards -- or, in the case of subsidies, downwards -- to counter-act the neglect of irrational actors. In addition, I argue that the ...


Against Endowment Theory: Experimental Economics And Legal Scholarship, Greg Klass, Kathryn Zeiler Jan 2013

Against Endowment Theory: Experimental Economics And Legal Scholarship, Greg Klass, Kathryn Zeiler

Faculty Scholarship

Endowment theory holds the mere ownership of a thing causes people to assign greater value to it than they otherwise would. The theory entered legal scholarship in the early 1990s and quickly eclipsed other accounts of how ownership affects valuation. Today, appeals to a generic “endowment effect” can be found throughout the legal literature. More recent experimental results, however, suggest that the empirical evidence for endowment theory is weak at best. When the procedures used in laboratory experiments are altered to rule out alternative explanations, the “endowment effect” disappears. This and other recent evidence suggest that mere ownership does not ...


Allowing Patients To Waive The Right To Sue For Medical Malpractice: A Response To Thaler And Sunstein, Tom Baker, Timothy D. Lytton Jan 2010

Allowing Patients To Waive The Right To Sue For Medical Malpractice: A Response To Thaler And Sunstein, Tom Baker, Timothy D. Lytton

Faculty Scholarship at Penn Law

This essay critically evaluates Richard Thaler and Cass Sunstein’s proposal to allow patients to prospectively waive their rights to bring a malpractice claim, presented in their recent, much acclaimed book, Nudge: Improving Decisions about Health, Wealth and Happiness. We show that the behavioral insights that undergird Nudge do not support the waiver proposal. In addition, we demonstrate that Thaler and Sunstein have not provided a persuasive cost-benefit justification for the proposal. Finally, we argue that their liberty-based defense of waivers rests on misleading analogies and polemical rhetoric that ignore the liberty and other interests served by patients’ tort law ...


For Both Love And Money: Viviana Zelizer's "The Purchase Of Intimacy", Martha M. Ertman Jun 2009

For Both Love And Money: Viviana Zelizer's "The Purchase Of Intimacy", Martha M. Ertman

Martha M. Ertman

Viviana Zelizer’s recent book, The Purchase of Intimacy (2005) presents an innovative theory of how social and legal actors negotiate rights and obligations when money changes hands in intimate relationships--a perspective that could change how we understand many things, from valuations of homemaking labor to the 9/11 Victim Compensation Fund. This essay describes Zelizer’s critique of the reductionist “Hostile Worlds” and “Nothing But” approaches to economic exchange in intimate relationships, then explains her more three-dimensional approach, “Connected Lives.” While Zelizer focuses on family law, the essay goes beyond that context, extending Zelizer’s approach to transfers of ...


The Sucker Norm, Tess Wilkinson-Ryan Jan 2009

The Sucker Norm, Tess Wilkinson-Ryan

Faculty Scholarship at Penn Law

In this paper, I review the theoretical and empirical scholarship bearing on the notion of being a sucker. I suggest that there is a social norm against being a sucker, and that a number of experimental results could be reconsidered in light of this "sucker norm." First, I establish, at least for the purposes of this analysis, the basic parameters of what it means to be a sucker. Second, I consider when the fear of being a sucker is helpful or normative, and when it seems to be misapplied to cases in which it might actually lead to sub-optimal outcomes ...


Law, Biology, And Property: A New Theory Of The Endowment Effect, Owen D. Jones, Sarah F. Brosnan Jan 2008

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

Vanderbilt Law School Faculty Publications

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 ...


Endowment Effects In Chimpanzees, Owen D. Jones, Sarah F. Brosnan, Susan P. Lambeth, Mary Catherine Mareno, Amanda S. Richardson, Steven Schapiro Jan 2007

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

Vanderbilt Law School Faculty Publications

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 ...


Valuing Cultural Differences In Behavioral Economics, Justin D. Levinson, Kaiping Peng Apr 2006

Valuing Cultural Differences In Behavioral Economics, Justin D. Levinson, Kaiping Peng

ExpressO

Behavioral economic research has tended to ignore the role of cultural differences in economic decision-making. The authors suggest that a systematic bias affects existing behavioral economic theory-- cognitive biases are often assumed to be universal. To examine how cultural background informs economic decision-making, and to test framing effects, morality effects, and out-group effects in a cross-cultural study, the authors conducted an experiment in the United States and China. The experiment was designed to test cultural and cognitive effects on a fundamental economic phenomenon-- how people estimate the financial values of objects over time.

Results of the experiment demonstrated dramatic cultural ...


Price, Path & Pride: Third-Party Closing Opinion Practice Among U.S. Lawyers (A Preliminary Investigation), Jonathan C. Lipson Mar 2005

Price, Path & Pride: Third-Party Closing Opinion Practice Among U.S. Lawyers (A Preliminary Investigation), Jonathan C. Lipson

ExpressO

This article presents the first in-depth exploration of third-party closing opinions, a common but curious – and potentially troubling -- feature of U.S. business law practice. Third-party closing opinions are letters delivered at the closing of most large transactions by the attorney for one party (e.g., the borrower) to the other party (e.g., the lender) offering limited assurance that the transaction will have legal force and effect.

Hundreds, if not thousands, of legal opinions are delivered every week. Yet, lawyers often complain that they create needless risk and cost, and produce little benefit. Closing opinions thus pose a basic ...


Law And Behavioral Biology, Owen D. Jones, Timothy H. Goldsmith Jan 2005

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

Vanderbilt Law School Faculty Publications

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 ...