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Predictably Incoherent Judgments

72 Pages Posted: 8 Aug 2001  

Cass R. Sunstein

Harvard Law School; Harvard University - Harvard Kennedy School (HKS)

Daniel Kahneman

Princeton University

David Schkade

University of California, San Diego

Ilana Ritov

Hebrew University of Jerusalem - School of Education

Date Written: July 2001

Abstract

When people make moral or legal judgments in isolation, they produce a pattern of outcomes that they would themselves reject, if only they could see that pattern as a whole. A major reason is that human thinking is category-bound. When people see a case in isolation, they spontaneously compare it to other cases that are mainly drawn from the same category of harms. When people are required to compare cases that involve different kinds of harms, judgments that appear sensible when the problems are considered separately often appear incoherent and arbitrary in the broader context. Another major source of incoherence is what we call the translation problem: The translation of moral judgments into the relevant metrics of dollars and years is not grounded in either principle or intuition, and produces large differences among people. The incoherence produced by category-bound thinking is illustrated by an experimental study of punitive damages and contingent valuation. We also show how category-bound thinking and the translation problem combine to produce anomalies in administrative penalties. The underlying phenomena have large implications for many topics in law, including jury behavior, the valuation of public goods, punitive damages, criminal sentencing, and civil fines. We consider institutional reforms that might overcome the problem of predictably incoherent judgments. Connections are also drawn to several issues in legal theory, including valuation of life, incommensurability, and the aspiration to global coherence in adjudication.

Keywords: Behavior, environment

JEL Classification: K32

Suggested Citation

Sunstein, Cass R. and Kahneman, Daniel and Schkade, David and Ritov, Ilana, Predictably Incoherent Judgments (July 2001). U Chicago Law & Economics, Olin Working Paper No. 131. Available at SSRN: https://ssrn.com/abstract=279181 or http://dx.doi.org/10.2139/ssrn.279181

Cass Sunstein (Contact Author)

Harvard Law School ( email )

1575 Massachusetts Ave
Areeda Hall 225
Cambridge, MA 02138
United States
617-496-2291 (Phone)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
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Daniel Kahneman

Princeton University ( email )

Department of Psychology 3-2-1 Green Hall
Princeton, NJ 08544
United States
609-258-2280 (Phone)
609-258-2809 (Fax)

David Schkade

University of California, San Diego ( email )

Rady School of Management
9500 Gilman Drive
La Jolla, CA 92093
United States
858-822-5933 (Phone)

HOME PAGE: http://management.ucsd.edu/cms/showcontent.aspx?ContentID=89

Ilana Ritov

Hebrew University of Jerusalem - School of Education ( email )

Mt. Scopus
Jerusalem, 91905
Israel
+972 2 652 9929 (Phone)

HOME PAGE: http://pluto.huji.ac.il/~msiritov/ilana_ritov.htm

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