Law and Behavioral Science: Removing the Rationality Assumption from Law and Economics

95 Pages Posted: 15 Aug 2000 Last revised: 3 Mar 2009

Russell B. Korobkin

UCLA School of Law

Thomas S. Ulen

University of Illinois College of Law

Abstract

As law and economics turns 40 years old, its continued vitality is threatened by its unrealistic core behavioral assumption: that people subject to the law act rationally. Professors Korobkin and Ulen argue that law and economics can reinvigorate itself by replacing the rationality assumption with a more nuanced understanding of human behavior that draws on cognitive psychology, sociology and other behavioral sciences, thus creating a new scholarly paradigm called "law and behavioral science". This article provides an early blueprint for research in this paradigm.

The authors first explain the various ways the rationality assumption is used in legal scholarship, and why it leads to unsatisfying policy prescriptions. They then systematically examine the empirical evidence inconsistent with the rationality assumption and, drawing on a wide-range of substantive areas of law, explain how normative policy conclusions of law and economics will change and improve under the law-and-behavioral-science approach.

JEL Classification: K00, K10

Suggested Citation

Korobkin, Russell B. and Ulen, Thomas S., Law and Behavioral Science: Removing the Rationality Assumption from Law and Economics. California Law Review, Vol. 88, 2000; U Illinois Law & Economics Research Paper No. 00-01. Available at SSRN: https://ssrn.com/abstract=229937 or http://dx.doi.org/10.2139/ssrn.229937

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)

Thomas S. Ulen

University of Illinois College of Law ( email )

504 E. Pennsylvania Avenue
Champaign, IL 61820
United States

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