Debiasing through Law

43 Pages Posted: 15 Sep 2004  

Christine Jolls

Yale Law School; National Bureau of Economic Research (NBER)

Cass R. Sunstein

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

Multiple version iconThere are 2 versions of this paper

Date Written: March 2005

Abstract

Human beings are often boundedly rational. In the face of bounded rationality, the legal system might attempt either to debias law, by insulating legal outcomes from the effects of boundedly rational behavior, or instead to debias through law, by steering legal actors in more rational directions. Legal analysts have focused most heavily on insulating outcomes from the effects of bounded rationality. In fact, however, a large number of actual and imaginable legal strategies are efforts to engage in debiasing through law - to help people reduce or even eliminate boundedly rational behavior. In important contexts, these efforts promise to avoid the costs and inefficiencies associated with regulatory approaches that take bounded rationality as a given and respond by attempting to insulate outcomes from its effects. This Article offers both a general theory of debiasing through law and a description of how such debiasing does or could work to address central legal questions in a large number of domains, from employment law to consumer safety law to corporate law to property law. Discussion is devoted to the risks of overshooting and manipulation that are sometimes raised when government engages in debiasing through law.

Keywords: labor, employment

Suggested Citation

Jolls, Christine and Sunstein, Cass R., Debiasing through Law (March 2005). U Chicago Law & Economics, Olin Working Paper No. 225; Harvard Law and Economics Discussion Paper No. 495. Available at SSRN: https://ssrn.com/abstract=590929 or http://dx.doi.org/10.2139/ssrn.590929

Christine Jolls

Yale Law School ( email )

127 Wall Street
New Haven, CT 06520
United States
203.432.1958 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Cass R. Sunstein (Contact Author)

Harvard Law School ( email )

1575 Massachusetts Ave
Areeda Hall 225
Cambridge, MA 02138
United States
617-496-2291 (Phone)

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

79 John F. Kennedy Street
Cambridge, MA 02138
United States

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