Behavioral Economics and Tort Law
The Oxford Handbook of Behavioral Economics and the Law (Eyal Zamir & Doron Teichman eds., 2014)
50 Pages Posted: 17 Sep 2014 Last revised: 13 May 2015
Date Written: September 1, 2014
The chapter, in the Oxford Handbook of Behavioral Economics and the Law, discusses the contributions of cognitive psychology and behavioral studies to the research of tort law. These contributions, we show, relate to a wide range of issues in torts: from the basic decision to impose tort liability, through the choice between liability rules, to specific rules and remedies. Accordingly, behavioral studies are of particular significance for the analysis of the tort system.
The literature review focuses on contributions made to three key elements of tort law: the choice between liability regimes; the choice between tort liability and regulation (including the choice between harm-based and risk-based liability); and damages (in particular, punitive damages and damages for pain and suffering).
We also offer two new avenues for future research: vicarious liability and people's perceptions of the variability among large groups of tort victims. Albeit under-researched, we think behavioral economics can offer significant contributions to the study of these areas.
Keywords: torts, damages, behavioral economics, cognitive biases, liability regimes, regulation, punitive damages, pain and suffering, outgroup homogeneity bias, vicarious liability
JEL Classification: A12, C91, C92, D70, D72, D78, K13, K20, K32
Suggested Citation: Suggested Citation