What Comes After Victory for Behavioral Law and Economics?

19 Pages Posted: 21 Mar 2011 Last revised: 27 Mar 2011

Russell B. Korobkin

UCLA School of Law

Date Written: March 15, 2011

Abstract

The battle to separate the economic analysis of legal rules and institutions from the straightjacket of strict rational choice assumptions has been won by the proponents of behavioral law and economics. With the revealed preferences assumption of neoclassical economics - that individual behavior necessarily maximizes subjective expected utility - discarded, what comes next for the discipline of law and economics? The article argues that theorists should turn their attention to a series of philosophical and methodological problems that surround the measurement of subjective expected utility: (1) the need to recognize and value autonomy for its own sake, separate from its ability to enhance utility; (2) the need to advance a theory of subjective utility that takes into account the use of heuristics in the construction of preferences as well as in understanding facts and judging probabilities; and (3) the need to recognize and confront the consequences of individual difference in the extent of bounded rationality.

Keywords: behavioral law and economics, heuristics, bounded rationality, preference construction, libertarian paternalism

Suggested Citation

Korobkin, Russell B., What Comes After Victory for Behavioral Law and Economics? (March 15, 2011). UCLA School of Law, Law-Econ Research Paper No. 11-10. Available at SSRN: https://ssrn.com/abstract=1787070

Russell B. Korobkin (Contact Author)

UCLA School of Law ( email )

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States
310-825-1994 (Phone)
310-206-7010 (Fax)

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