The Uneasy Case for Parsimony in (Law and) Economics: Or How to Talk About Value Judgements

Abstract

This paper has been written as an invited contribution to a symposium on Guido Calabresi’s book on The Future of Law and Economics. Taking Calabresi’s discussion of preferences and value judgements in law and economics as a starting point, this paper analyses some conceptual difficulties, epistemic benefits and normative uses of parsimonious economic analyses of “tastes and values.” First, the paper shows that it is not only possible to analyse and model all the richness of “tastes and values” in terms of rational choice theory with intellectual honesty and epistemic benefit. In fact, economists and economically inspired legal scholars have been doing this for a while. Second, it discusses three arguments that economists can mount in support of parsimonious models. Third, it shows that in spite of such benefits the merits of such an exercise in parsimony do not always clearly outweigh its drawbacks. More importantly, it points at some conceptual limits of such parsimonious modelling.

Keywords: law and economics, parsimony in economic models, values in economics, Guido Calabresi

JEL Classification: A13, B41, D63, K00