Behavioral Economics and Court Decision-Making

Abstract

The economic analysis of law assumes that court decisions are key to incentivizing people and maximizing social welfare. This Article reviews the behavioral literature on court decision making, and highlights numerous heuristics and biases that impact judges and jurors and cause them to make decisions that diverge from the social optimum. In light of this review, the article analyzes some of the institutional features of the court system that may help minimize the costs of biased decisions in the courts.

Keywords: Behavioral Law and Economics; Judicial Decision Making; Hindsight Bias; Anchoring; Debias

JEL Classification: K00, K41