Behavioral Law & Economics goes to Court: The Fundamental Flaws in the Behavioral Law & Economics Arguments Against No-Surcharge Laws

International Center for Law & Economics (ICLE), Financial Regulation Research Program White Paper 2016-1

72 Pages Posted: 24 Jun 2019

See all articles by Todd J. Zywicki

Todd J. Zywicki

George Mason University - Antonin Scalia Law School, Faculty; PERC - Property and Environment Research Center

Geoffrey A. Manne

International Center for Law & Economics (ICLE)

Kristian Stout

International Center for Law & Economics (ICLE)

Date Written: September 1, 2017

Abstract

In this article we examine the merits the arguments furthered by the field of behavioral law and economics over credit card surcharge fees. Claims about the real-world application of behavioral economic theories should not be uncritically accepted — especially when advanced to challenge a state’s commercial regulation on constitutional grounds. And courts should be especially careful before relying on such claims where the available evidence fails to support them, where the underlying theories are so poorly developed that they have actually been employed elsewhere to support precisely opposite arguments, and where alternative theories grounded in more traditional economic reasoning are consistent with both the history of the challenged laws and the evidence of actual consumer behavior.

Keywords: Behavioral Economics, Behavioral Law and Economics, Consumer Finance, Consumer Protection, Corporate Governance, DG Comp, Financial Regulation, First Amendment, Payments, Surcharging

Suggested Citation

Zywicki, Todd J. and Manne, Geoffrey and Stout, Kristian, Behavioral Law & Economics goes to Court: The Fundamental Flaws in the Behavioral Law & Economics Arguments Against No-Surcharge Laws (September 1, 2017). International Center for Law & Economics (ICLE), Financial Regulation Research Program White Paper 2016-1 . Available at SSRN: https://ssrn.com/abstract=3405709 or http://dx.doi.org/10.2139/ssrn.3405709

Todd J. Zywicki

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States
703-993-8091 (Phone)
703-993-8088 (Fax)

PERC - Property and Environment Research Center

2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

Geoffrey Manne (Contact Author)

International Center for Law & Economics (ICLE) ( email )

2117 NE Oregon St.
Suite 501
Portland, OR 97232
United States
503-770-0076 (Phone)

HOME PAGE: http://www.laweconcenter.org

Kristian Stout

International Center for Law & Economics (ICLE) ( email )

2117 NE Oregon St.
Ste 501
Portland, OR Oregon 97232
United States
5037700076 (Phone)
5037700076 (Fax)

HOME PAGE: http://www.laweconcenter.org

Register to save articles to
your library

Register

Paper statistics

Downloads
6
Abstract Views
89
PlumX Metrics