Voluntary Agreements

Forthcoming, Journal of Economic Methodology

9 Pages Posted: 28 Feb 2020

See all articles by Cass R. Sunstein

Cass R. Sunstein

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

Date Written: February 21, 2020

Abstract

In philosophy, economics, and law, the idea of voluntary agreements plays a central role. It orients contractarian approaches to political legitimacy. It also helps support the claim that outsiders, and especially the state, should not interfere with private contracts. But contractarianism in political philosophy stands (or falls) on altogether different grounds from enthusiasm for contractual ordering in economics and law. When participants in voluntary agreements lack information or suffer from behavioral biases (including adaptive preferences), there is reason to help them, potentially through mandates and bans. In philosophy, the idea of contractarianism can help lead to instructive thought experiments about what justice requires, as with John Rawls’ use of the veil of ignorance and the original position; it should not be taken as a basis for theories of legitimacy that rest on actual agreements among actual groups, in which some people have more information and power than others, and in which malice and self-interest may lead to distortions.

Suggested Citation

Sunstein, Cass R., Voluntary Agreements (February 21, 2020). Forthcoming, Journal of Economic Methodology. Available at SSRN: https://ssrn.com/abstract=3543475

Cass R. Sunstein (Contact Author)

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

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