The Value of Behavioral Economics for EU Judicial Decision-Making

German Law Journal, Vol. 21, 2020

25 Pages Posted: 18 Nov 2021

See all articles by Christoph Winter

Christoph Winter

Harvard University; Instituto Tecnológico Autónomo de México; Legal Priorities Project

Date Written: 2020

Abstract

This Article analyzes the value of behavioral economics for EU judicial decision-making. The first part introduces the foundations of behavioral economics by focusing on cognitive illusions, prospect theory, and the underlying distinction between different processes of thought. The second part examines the influence of selected biases and heuristics, namely the anchoring effect, availability bias, zero-risk bias, and hindsight bias on diverse legal issues in EU law including, among others, the scope of the fundamental freedoms, the proportionality test as well as the roles of the Advocate General and Reporting Judge. The Article outlines how behavioral economic findings can be taken into account to improve judicial decision-making. Accordingly, the adaptation of judicial training concerning cognitive illusions, the establishment of a de minimis rule regarding the scope of the fundamental freedoms, and the use of economic models when determining the impact of certain measures on fundamental freedoms is suggested. Finally, an “unbiased jury” concentrating exclusively on specific factual issues such as causal connections within the proportionality test is necessary, if the hindsight bias is to be avoided. While it is of great importance to take behavioral economic findings into account, judicial decision-making is unlikely to become flawless based on natural intelligence. Despite bearing fundamental risks, artificial intelligence may provide means to achieve greater fairness, consistency, and legal certainty in the future.

Keywords: Judicial decision-making, behavioral law & economics, cognitive biases, EU law, internal market law, proportionality, unbiased jury, Dassonville

Suggested Citation

Winter, Christoph, The Value of Behavioral Economics for EU Judicial Decision-Making (2020). German Law Journal, Vol. 21, 2020, Available at SSRN: https://ssrn.com/abstract=3935767

Christoph Winter (Contact Author)

Harvard University ( email )

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United States

HOME PAGE: http://www.christophwinter.net/

Instituto Tecnológico Autónomo de México ( email )

Río Hondo 1
Mexico City, D.F. 01000, Federal District 01080
Mexico

Legal Priorities Project ( email )

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Cambridge, MA 02139
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