Law and Economics Commons^™

Efficient Penalty Clauses With Debiasing: Lessons From Behavioral Law And Economics, Enrico Baffi

enrico baffi

This paper builds upon the findings of cognitive psychology to revisit the prescriptive solutions proposed in the legal literature with respect to efficient penalty clauses. While refraining from generalizations regarding human behaviour, generalizations that might lead to positions quite removed from reality and in part ideological, as was the case with rational choice theory, the paper instead seeks to distinguish one situation from another in order to identify the existence of decision debiasing mechanisms capable of justifying - in the case of the set of rules in question - hypotheses in which lesser control over the penalty clause would be …