A Liberal Challenge to Behavioral Economics: The Case of Probability

Stein, Alex

Abstract

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A Liberal Challenge to Behavioral Economics: The Case of Probability

Alex Stein

Yeshiva University - Benjamin N. Cardozo School of Law

New York University Journal of Law & Liberty (Symposium on Behavioral Law & Economics' Challenge to the Classical Liberal Program), Vol. 2, 2007
Cardozo Legal Studies Research Paper No. 180

Abstract:
This paper argues that Behavioral Economics (BE) needs to be liberally inclusive in formulating its criteria for rationality against which to evaluate people's cognitive ability and performance. The paper focuses on BE's assessment of people's probabilistic reasoning. It examines the famous Blue Cab experiment upon which several behavioral studies have grounded their assessment of an average person as probabilistically challenged. The paper identifies a number of flaws in that experiment. The most serious of these flaws is the confusion between cognitive performance and cognitive competence.

Number of Pages in PDF File: 10

Keywords: Behavioral law and economics

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Date posted: January 30, 2007 ; Last revised: October 8, 2007

Suggested Citation

Stein, Alex, A Liberal Challenge to Behavioral Economics: The Case of Probability. New York University Journal of Law & Liberty (Symposium on Behavioral Law & Economics' Challenge to the Classical Liberal Program), Vol. 2, 2007; Cardozo Legal Studies Research Paper No. 180. Available at SSRN: http://ssrn.com/abstract=960306

Contact Information

Alex Stein (Contact Author)

Yeshiva University - Benjamin N. Cardozo School of Law ( email )

55 Fifth Ave.
New York, NY 10003
United States