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Experimental Law and Economics

EXPERIMENTAL LAW AND ECONOMICS, Jennifer Arlen, Eric Talley, eds., Edward Elgar, 2008

NYU Law and Economics Research Paper No. 08-30

63 Pages Posted: 16 Jun 2008 Last revised: 21 Sep 2008

Jennifer Arlen

New York University School of Law

Eric L. Talley

Columbia University - School of Law

Abstract

This chapter provides a framework for assessing the contributions of experiments in Law and Economics. We identify criteria for determining the validity of an experiment and find that these criteria depend upon both the purpose of the experiment and the theory of behavior implicated by the experiment. While all experiments must satisfy the standard experimental desiderata of control, falsifiability of theory, internal consistency, external consistency and replicability, the question of whether an experiment also must be contextually attentive - in the sense of matching the real world choice being studied - depends on the underlying theory of decision-making being tested or implicated by the experiment.

We find that the importance of contextual attentiveness depends on whether the experiment tests or implicates a "nitary-process" theory of decision-making or a multiple-process theory. Unitary-process theories posit that people employ a single operational approach to make decisions across a broad (or universal) domain of activity. Rational Choice Theory is a unitary-process theory. Because unitary-process theories posit that people employ the same decision-making program in all contexts, experimenters can falsify a unitary-process theory using an experimental choice which bears little resemblance to any real-world choice. Faith in a unitary process account also permits legal policymakers to draw broad normative implications from experiments involving quite artificial choices. By contrast, multiple-process theories hold that people employ multiple decision-making programs when they make choices. Moreover, the relative impact of these programs can depend on the context of the decision. This posited interaction between context and decision-making implies that experimentalists seeking to examine legal decision-making must be sensitive to contextual factors likely to affect deliberative and non-conscious programs in the real world. In addition, policymakers must proceed cautiously before using experimental evidence to draw normative policy conclusions because experimental results may not be robust across contexts.

Suggested Citation

Arlen, Jennifer and Talley, Eric L., Experimental Law and Economics. EXPERIMENTAL LAW AND ECONOMICS, Jennifer Arlen, Eric Talley, eds., Edward Elgar, 2008; NYU Law and Economics Research Paper No. 08-30. Available at SSRN: https://ssrn.com/abstract=1144086

Jennifer Arlen (Contact Author)

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

HOME PAGE: http://https://its.law.nyu.edu/facultyprofiles/profile.cfm?personID=20658

Eric L. Talley

Columbia University - School of Law ( email )

435 West 116th Street
New York, NY 10025
United States

HOME PAGE: http://www.erictalley.com

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