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Publications (107)
Reason‐giving is a hallmark of judicial decision‐making. However, many judicial decisions are not accompanied by detailed reasons—or any reasons at all. Judicial reason‐giving serves various goals, including constraining judges' discretion. The very engagement in writing and the enhanced accountability that comes with the provision of written reaso...
Previous studies of judgment and decision‐making in adjudication have largely focused on juries and judges. This body of work demonstrated that legal training and professional experience sometimes affect attitudes and mitigate the susceptibility to cognitive biases, but often they do not. Relatively few experimental studies examined the decisions o...
The law often lays down mandatory rules, from which the parties may deviate in favor of one party but not the other. Examples include the invalidation of high-liquidated damages and the unenforceability of excessive noncompete clauses in employment contracts. In these cases, the law may substitute the invalid term with a moderate arrangement, with...
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...
The threat of sanctions is often insufficient to ensure compliance with legal norms. Recently, much attention has been given to nudges – choice-preserving measures that take advantage of people’s automatic System 1 thinking – as a means of influencing behaviour without sanctions, but nudges are often ineffective and controversial. This article expl...
The use of nudges—“low-cost, choice-preserving, behaviorally informed approaches to regulatory problems”—has become quite popular at the national level in the past decade or so. Examples include changing the default concerning employees’ saving for retirement in a bid to encourage such saving; altering the default about consent to posthumous organ...
In recent years, numerous empirical studies have examined the prevailing attitudes toward nudges, but hardly any have examined the prevailing attitudes toward mandatory rules. To fill this gap, this article describes five studies (N = 3,103)—mostly preregistered studies conducted with representative samples of the U.S. population—which tested peopl...
Psychologists, economists, historians, computer scientists, sociologists, philosophers, and legal scholars explore the conscious choice not to seek information.
The history of intellectual thought abounds with claims that knowledge is valued and sought, yet individuals and groups often choose not to know. We call the conscious choice not to seek or...
Many human decisions, ranging from the taking of loans with compound interest to fighting deadly pandemics, involve phenomena that entail exponential growth. Yet a wide and robust body of empirical studies demonstrates that people systematically underestimate exponential growth. This phenomenon, dubbed the exponential growth bias (EGB), has been do...
Legal systems differ about the availability of specific performance as a remedy for breach of contract. While common law systems deny specific performance in all but exceptional cases, civil law systems generally award enforcement remedies subject to some exceptions. However, there is an ongoing debate about the extent to which the practice of liti...
Market regulation has traditionally focused on disclosure duties, yet mounting evidence questions their effectiveness. The efficacy of nudges is similarly doubted, especially when suppliers counter their effects. Consequently, there is growing interest in mandatory regulation of the content of contracts. Previous studies have examined public opinio...
Regulation of the content of standard-form contracts usually focuses on the invisible terms that customers hardly ever read. It does not refer to the price, because price is a salient component of the transaction, to which customers usually pay attention and sometimes even compare between suppliers. However, it is often difficult to draw the line b...
Psychologists, economists, historians, computer scientists, sociologists, philosophers, and legal scholars explore the conscious choice not to seek information.
The history of intellectual thought abounds with claims that knowledge is valued and sought, yet individuals and groups often choose not to know. We call the conscious choice not to seek or...
This article introduces the concept of nudge – low-cost behaviourally informed modes of regulation that influence people’s decisions without limiting their choice set – into the behavioural analysis of international law. It sketches out the pathways through which nudges might influence the behaviour of countries, and highlights the normative implic...
Based on the premise that people are rational maximizers of their own utility, economic analysis has a fairly successful record in correctly predicting human behavior. This success is puzzling, given behavioral findings that show that people do not necessarily seek to maximize their own utility. Drawing on studies of motivated reasoning, self-servi...
The Oxford Handbook of Ethics and Economics provides a timely and thorough survey of the various ways ethics can, does, and should inform economic theory and practice. The first part of the book, Foundations, explores how the most prominent schools of moral philosophy relate to economics; asks how morals relevant to economic behavior may have evolv...
In the past few decades, economic analysis of law has been challenged by a growing body of experimental and empirical studies that attest to prevalent and systematic deviations from the assumptions of economic rationality. While the findings on bounded rationality and heuristics and biases were initially perceived as antithetical to standard econom...
This chapter begins with a brief overview of the standard economic analysis of litigation and settlement. It then analyzes a series of behavioral impediments to settlement. These include self-serving biases, overoptimism, non-pecuniary motivations, biases stemming from the adversarial nature of litigation, reference-dependence in assessing settleme...
This chapter presents an overview of the behavioral analysis of contract law. It first presents a behavioral theory of contracts that highlights the role of values such as promise-keeping and trust, and examines how the role played by those values depends on whether the contract is a product of negotiation or not (i.e., a standard-form contract). T...
This chapter presents an overview of the behavioral analysis of the law of consumer contracts. The chapter reviews various marketing techniques that build upon consumers’ bounded rationality, including the manner of presenting information, limited availability, low-ball and bait-and-switch techniques, and lenient return policies. It also analyzes s...
This chapter presents an overview of the behavioral analysis of tort law. It begins by presenting a summary of traditional economic analysis of tort law. That done, it examines various tort regimes (i.e., negligence and strict liability), as well as alternative legal regimes that base liability on the creation of risk rather than the materializatio...
The chapter introduces behavioral law and economics. It is divided into three sections. The first section describes the history of behavioral law and economics since the late 1970s. The second section discusses the methodologies used in this sphere, including the emergence of empirical legal studies. Empirical legal studies include lab-experimental...
The chapter critically analyzes the contribution of behavioral findings to property law and theory. It starts with studies of basic notions, such as psychological ownership and the endowment effect; and moves on to discuss two major fields: constitutional property law and intellectual property. With regard to the former, the analysis shows how beha...
This chapter surveys the contributions of behavioral studies to the analysis of criminal law and law enforcement. It begins by introducing the key insights of economic analysis of crime control. It then examines the extent to which people’s moral judgments are compatible with the dictates of economic analysis in this sphere—and the associated norma...
This chapter argues that reference-dependence and loss aversion are crucial not only to understanding human behavior, but also to understanding how the law shapes people’s behavior. Moreover, it argues that reference-dependence and loss aversion can explain—and possibly justify—key features of the law itself. It shows how these psychological notion...
Public choice theory—the application of standard economics to the behavior of public officials and citizens—has long been criticized as mischaracterizing people’s motivations and behavior. The chapter analyzes how behavioral studies might contribute to a better understanding and developing of public law, including constitutional and administrative...
This chapter critically surveys the behavioral analysis of commercial law. It begins by examining the preliminary question of whether bounded rationality can persist in well-functioning, highly competitive markets. As the theoretical analysis and empirical evidence demonstrate, irrational behavior is present even in such settings. The chapter goes...
This chapter discusses the normative implications of the psychological findings documenting deviations from rationality, with particular focus on fundamental issues that cut across different legal fields. It first outlines the contribution of happiness studies and heuristics-and-biases research to theories of human welfare and the formulation of no...
While behavioral insights are vital to any theory of law, they are particularly important as qualifiers of standard economic analysis of law. Standard economic analysis assumes that people are rational maximizers of their own utility. As a normative theory, it ultimately takes into account only human welfare and focuses on maximization of aggregate...
This chapter consists of three main parts. It first discusses the effect of various cognitive limitations, heuristics, and biases on the actual and perceived credibility of various types of evidence—including eyewitness testimonies, probabilistic data, and circumstantial evidence. It further examines the extent to which the use of expert testimonie...
Against the background of rational choice theory, this chapter provides an overview of the behavioral sub-disciplines informing behavioral law and economics—including judgment and decision-making studies, parts of social psychology, moral psychology, experimental game theory, and behavioral ethics. The chapter discusses deviations from cognitive an...
This chapter discusses the rich behavioral research on judicial decision-making. It opens with general theories of the cognitive process of judicial decision-making, focusing on the story model and coherence-based reasoning. It examines how various heuristics and biases—such as the compromise and contrast effects, hindsight bias, omission bias, and...
This chapter examines the implications of behavioral insights for tax design, taxpayers’ decision-making, and tax compliance. With regard to tax design, the chapter discusses policymakers’ own heuristics and biases, and their catering to (or exploitation of) the biased judgments of the public at large. Regarding economic decision-making, the chapte...
Public choice theory (PCT) has had a powerful influence on political science and, to a lesser extent, on public administration. Based on the premise that public officials are rational maximizers of their own utility, PCT has a quite successful record of correctly predicting governmental decisions and policies. This success is puzzling, given behavi...
Public choice theory (PCT) has had a powerful influence on political science and public administration. Based on the premise that public officials are rational maximizers of their own utility, PCT has a quite successful record of correctly predicting governmental decisions and policies. This success is puzzling, given behavioral findings that show...
Incorporating behavioral insights into regulation is plausibly the most significant development in regulatory theory and practice in recent years. Behaviorally informed regulation encourages self-benefiting and socially desirable behaviors with little intrusion on autonomy. Drawing on new empirical findings, this article puts forward the hitherto o...
Hebrew Submission: מוכר נכס תבע מהקונה פיצויים מוסכמים בשל הפרת חוזה המכר. בין הקונה לבין עורך הדין שייצג אותה בתביעה הוסכם בעל-פה ששכר טרחתו של עורך הדין יהיה בשיעור ההפרש בין סכום הפיצויים המוסכמים שהלקוחה נתבעה לשלם לבין הסכום שבו היא תחויב למעשה. בית-משפט השלום קיבל את תביעתו של עורך הדין לשכר טרחה בשיעור זה, בית המשפט המחוזי הפחית במידת מה את...
The past twenty years have witnessed a surge in behavioral studies of law and law-related issues. These studies have challenged the application of the rational-choice model to legal analysis and introduced a more accurate and empirically grounded model of human behavior. This integration of economics, psychology, and law is breaking exciting ground...
Kahneman and Tversky’s prospect theory is probably the most influential contribution to behavioral economics, and loss aversion is the most important element of this theory: Losses loom larger than gains. This chapter surveys the effect this notion has had on legal theory. It first provides an overview of the vast psychological literature on loss a...
When social resources are limited, improving the lot of the underprivileged comes at the expense of others. Thus, policies such as Affirmative Action (AA)—designed to increase the representation of minority people in higher education or employment—implicitly entail tradeoffs between groups. We propose that, while aversion to person- or group-tradeo...
»Vielmehr bietet [der Kommentar] auf höchstem Niveau eine substantielle Auseinandersetzung mit den Hintergründen, den Zusammenhängen, der Theorie und der Praxis des Grundgesetzes. Besseres lässt sich von einem Verfassungskommentar nicht sagen.“ Herbert Günther Staaatsanzeiger für das Land Hessen 2018 (50), 1494–1495
Lawyers’ contingent fee (CF) rates are rather uniform, often one-third of the recovery. Arguably, this uniformity is a type of anti-competitive price-fixing, which results in clients paying supra-competitive fees. This paper challenges this argument. It shows that uniform CF rates provide clients with an important advantage, as such rates enable th...
Israel is a mixed legal system, profoundly influenced by both the Common Law and Civil Law traditions. Against the background of an unprincipled mixture of Ottoman, British, and religious legal norms, Israel embarked on the challenging project of crafting its own modern Civil Code, based primarily on Civil Law systems, but incorporating Common Law...
A large body of studies suggests that people are reluctant to impose liability on the basis of circumstantial evidence alone, even when this evidence is more reliable than direct evidence. Current explanations for this pattern of behavior focus on factors such as the tendency of factfinders to assign low subjective probabilities to circumstantial e...
Lawyers’ Contingent Fee (CF) rates are rather uniform, often one-third of the recovery. Arguably, this uniformity attests to collusion in the market, resulting in clients paying supra-competitive fees. This paper challenges this common argument.Uniform CF rates are not necessarily superior to negotiable ones; yet they provide clients with an import...
This is the second book symposium of Volume 3 of the JRLS - it consists of a discussion of Eyal Zamir and Barak Medina’s “Law, Economics, and Morality” (Oxford University Press, 2010). It includes critical comments by Dr. Avihay Dorfman, Prof. Larry Alexander and Prof. Ariel Porat, to which Zamir and Medina then respond.
This is a report on the codification of private law in Israel, prepared for the Thematic Congress of the International Academy of Comparative Law, to be held in Taiwan in May 2012. It provides a general overview of the private law legislation in Israel and the process of its integration into a unified civil code; its socioeconomic background and so...
In our book, Law, Economics, and Morality (OUP, 2010), we proposed to combine economic methodology and deontological morality through explicit incorporation of moral constraints into economic models. We argued that the normative flaws of economic analysis can be rectified without relinquishing its methodological advantages and that moral constraint...
The basic rule in civil litigation is that the plaintiff carries the burden of proof and the general standard of proof is preponderance of the evidence. The plaintiff prevails if she establishes her case with a probability exceeding 0.5. Drawing on insights from behavioral economics and new experimental findings, this paper makes the following argu...
Why is tort law much more developed than unjust enrichment law? Is there a reason for the very different legal treatment of governmental takings and governmental givings? Why are contract remedies structured around the four ‘interests’ and why is the disgorgement interest only marginally protected? What might explain the fact that affirmative actio...
Law, Economics, and Morality examines the possibility of combining economic methodology and deontological morality through explicit and direct incorporation of moral constraints into economic models. Economic analysis of law is a powerful analytical methodology. However, as a purely consequentialist approach, which determines the desirability of ac...
Economic analysis of law is a powerful analytical methodology. However, as a purely consequentialist approach, which determines the desirability of acts and rules solely by assessing the goodness of their outcomes, standard cost-benefit analysis (CBA) is normatively objectionable. Moderate deontology prioritizes such values as autonomy, basic liber...
Economic analysis of law is a powerful analytical methodology. However, as a purely consequentialist approach, which determines the desirability of acts and rules solely by assessing the goodness of their outcomes, standard cost-benefit analysis (CBA) is normatively objectionable. Moderate deontology prioritizes such values as autonomy, basic liber...
Economic analysis of law is a powerful analytical methodology. However, as a purely consequentialist approach, which determines the desirability of acts and rules solely by assessing the goodness of their outcomes, standard cost-benefit analysis (CBA) is normatively objectionable. Moderate deontology prioritizes such values as autonomy, basic liber...
Economic analysis of law is a powerful analytical methodology. However, as a purely consequentialist approach, which determines the desirability of acts and rules solely by assessing the goodness of their outcomes, standard cost-benefit analysis (CBA) is normatively objectionable. Moderate deontology prioritizes such values as autonomy, basic liber...
Economic analysis of law is a powerful analytical methodology. However, as a purely consequentialist approach, which determines the desirability of acts and rules solely by assessing the goodness of their outcomes, standard cost-benefit analysis (CBA) is normatively objectionable. Moderate deontology prioritizes such values as autonomy, basic liber...
Economic analysis of law is a powerful analytical methodology. However, as a purely consequentialist approach, which determines the desirability of acts and rules solely by assessing the goodness of their outcomes, standard cost-benefit analysis (CBA) is normatively objectionable. Moderate deontology prioritizes such values as autonomy, basic liber...
Economic analysis of law is a powerful analytical methodology. However, as a purely consequentialist approach, which determines the desirability of acts and rules solely by assessing the goodness of their outcomes, standard cost-benefit analysis (CBA) is normatively objectionable. Moderate deontology prioritizes such values as autonomy, basic liber...
Economic analysis of law is a powerful analytical methodology. However, as a purely consequentialist approach, which determines the desirability of acts and rules solely by assessing the goodness of their outcomes, standard cost-benefit analysis (CBA) is normatively objectionable. Moderate deontology prioritizes such values as autonomy, basic liber...
Economic analysis of law is a powerful analytical methodology. However, as a purely consequentialist approach, which determines the desirability of acts and rules solely by assessing the goodness of their outcomes, standard cost-benefit analysis (CBA) is normatively objectionable. Moderate deontology prioritizes such values as autonomy, basic liber...
Economic analysis of law is a powerful analytical methodology. However, as a purely consequentialist approach, which determines the desirability of acts and rules solely by assessing the goodness of their outcomes, standard cost-benefit analysis (CBA) is normatively objectionable. Moderate deontology prioritizes such values as autonomy, basic liber...
Notions of fairness play an important role in assessing the validity of transactions. Fairness judgments may refer to various aspects of the transaction; yet their primary object is the adequacy of remuneration: Does each party receives fair value in return for what she gives. One type of transaction whose fairness is constantly and extensively deb...
This is a chapter of our book titled Law, Economics, and Morality, in which we propose to integrate threshold deontological constraints (and options) with cost-benefit analysis (CBA), thus combining economic methodology with deontological morality. The chapter presents a constrained CBA of measures taken in the fight against terrorism. It begins by...
This is a chapter of a book titled Law, Economics, and Morality, which proposes to integrate threshold deontological constraints (and options) with cost-benefit analysis, thus combining economic methodology with deontological morality. The chapter discusses the claim that even if moderate deontology is the correct moral theory for individuals, cons...
Building on Kahneman and Tversky's prospect theory, this paper presents a series of experiments designed to reveal people's preferences regarding attorneys' fees. Contrary to common economic wisdom, it demonstrates that loss aversion (rather than risk aversion or incentivizing the lawyer to win the case) plays a major role in clients' preferences f...
Contract interpretation and supplementation is conventionally conceived of as a multistage process, in which various sources, including express terms, course of performance, course of dealing, trade usages, default rules, and general standards of reasonableness, are sequentially resorted to. The decision maker should not turn to any particular sour...
The market for legal services, and particularly lawyers' Contingent Fee (CF) arrangements, have been extensively studied from legal, economic and sociological standpoints, but curiously not from a behavioral perspective. Building on Kahneman and Tversky's Prospect Theory, this paper presents a series of experiments designed to reveal people's prefe...