Behavioral Law and Economics
Abstract
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 economic and legal-economic analysis, over time they have been largely integrated into mainstream economic analysis, including economic analysis of law. Moreover, the impact of behavioral insights has long since transcended purely economic analysis of law: in recent years, the behavioral movement has become one of the most influential developments in legal scholarship in general. Behavioral Law and Economics offers a state-of-the-art overview of the field. The book surveys the entire body of psychological research underpinning behavioral analysis of law, and critically evaluates the core methodological questions of this area of research. The book then discusses the fundamental normative questions stemming from the psychological findings on bounded rationality, and explores their implications for establishing the aims of legislation, and the means of attaining them. This is followed by a systematic and critical examination of the contributions of behavioral studies to all major fields of law-property, contracts, consumer protection, torts, corporate, securities regulation, antitrust, administrative, constitutional, international, criminal, and evidence law-as well as to the behavior of key players in the legal arena: litigants and judicial decision-makers.
... The paper aims to illustrate how moral transaction costs, administrative failures, risk aversion resulting form type-I-type-II error, and behavioural phenomena result in vaccine-rollout failures. By incorporating the main insights from the classic law and economics literature (Calabresi, 1970;Shavell, 2004;Schäfer and Ott, 2004;Posner, 2011, Leitzel, 2015 and behavioral law and economics scholarship (Zamir and Teichman, 2020;Sunstein, 2019Sunstein, , 2007, this paper examines current vaccination-rollout policies and provides a set of substantive insights on an improved public policy respond in the Covid-19 vaccination-rollout practices in the EU and for any future potential pandemic vaccination-rollout challenge. ...
... vaccine's producers) marginal costs, then they will stick with such procedures also in time of global pandemic. Namely, if changing the status quo requires an action, while maintaining the status quo involves a mere omission, then administrators will prefer omission to action-invoking omission bias (Schweitzer, 1994;Zamir and Teichman, 2020). Moreover, such administrator's decision-making forms reference point and any departure from this reference point is regarded as a loss (Tversky and Kahneman, 1979). ...
... Although employment of debiasing techniques raise a considerable amount of controversy (Larick, 2004: Soll et al., 2015 they may be classified as technological, cognitive, and motivational (Larrick, 2004). Among technological tolls one may suggest the employment of linear models that provide to the decision-maker a combined score for each policy alternative (empirically established relationships between data and given dependent variable) based on the weighted value of each attribute (Zamir and Teichman, 2020;Dawes et al., 1989). Motivational techniques focus on increasing administrator's motivation to perform well. ...
This paper seeks to address the role of European public policy in addressing the problem of Covid-19 vaccine-rollout policy. Currently in Europe, instead of market-based allocation a centralized command-based approach has been implemented to address the essential questions of production and distribution of vaccines throughout the EU. This is centralized, command-based decision-making on the allocation of vaccines which is leading to political and sociological tensions among EU Member States. Paper argues that in order to mitigate these shortcomings European public policy could employ a more nuanced approach. While employing law and economics tools this paper addresses the questions on how European societies should allocate vaccine and, more importantly, who should make this allocation decisions. Moreover, identified moral negative externalities, status quo and omission biases, planning fallacy, risk aversion, administrative rigidity, notorious type-I-type-II error fallacy and related unraveled markets phenomena might result in vaccine-rollout failures.
... (…) Un corolario del realismo ingenuo es que las personas reconocen fácilmente este prejuicio, y una serie de otros prejuicios, en las percepciones y juicios de otras personas, pero a menudo tienen un punto ciego con respecto a su propio realismo ingenuo (y otros prejuicios). Incluso cuando las personas son conscientes de sus propios prejuicios, tienden a creer que son más capaces que otros de evaluar la magnitud y el efecto de esos prejuicios (Zamir & Teichman, 2018). Para este caso, todos creen tener la razón, sin darse cuenta de que persisten en un error que da al traste con el sistema paralelo propuesto. ...
El presente artículo busca establecer el origen del valor de los criptoactivos desde el punto de vista técnico y la influencia que tiene el comportamiento de sus usuarios en la fluctuación de dicho valor. Adicionalmente, busca explicar este tipo de comportamiento y pone de presente la paradoja alusiva a la pérdida de libertad financiera que genera la regulación de criptoactivos, intervención que se justifica por el mal uso que los usuarios hacen de los mismos.
... Here we note that Iraq is living a deficit in the public budget and a deficit in the trade balance as well. Public debt has a negative impact on current and future generations because public debt is a transfer of money from one country to another, but this transfer works on an inappropriate distribution of income and has significant negative effects borne by Future generations In view of the impact of the country's public debt, therefore, an appropriate fiscal policy must be determined for the country's situation in order to reduce its burdens and financial problems, as the public debt should not be used to balance the public budget, but to achieve the optimal use of economic resources in full in order to revive the Iraqi economy and achieve economic growth in it because the public debt has risen very significantly in recent years and has become a great weight on the Iraqi government in paying it with its interests [8], [9], [10], [11]. ...
The Iraqi economy has gone through a lot of challenges, difficulties, problems, wars and the collapse of infrastructure and these conditions led to the occurrence of the fiscal deficit in Iraq, especially after 2003, as the financial deficit was financed by public debt and we will focus here in this research on the analysis and study of the public budget deficit and public debt in Iraq through the use of the analytical approach of data to analyze the data of the public budget deficit on the public debt in Iraq The research has found that the increase The fiscal deficit in the public budget increases dependence on public debt in order to finance that deficit and this means bearing large financial burdens because the public debt has burdens and financial problems added to the public budget as the research recommends the need to adopt a well-studied and appropriate economic policy in order to reduce the deficit in the public budget first and adopt a well-thought-out policy to manage the public debt in order to reduce its burdens and problems second, As well as avoiding financial crises that negatively affect the reality of the Iraqi economy.
... Behavioral finance is developed as a distinct discipline which tries to work on the causes of stock market anomalies (Zamir & Teichman, 2018) by mitigating them and clarifying so that investors take informed investment decisions. It moreover, facilitates finding reasons which an investor uses for tailor-made investment solution depending on his age, income, education, gender, information about security and peer behavior . ...
The current research focuses on the effect of emotional biases on the investment decision-making process among individual investors of India. This article is steered by conducting a survey on 631 individual investors of India participating in Indian stock market. Through a structured questionnaire as a research instrument, the study gauges behavioural biases of individual investors. An exploratory study by nature, the analysis of the study supports evidence establishing the adverse nature of behavioral biases affecting investment analysis and further their decision-making. The research implies a statistically significant association among behavioural biases and investment related decisions. The findings are significant for all the stakeholders of Indian stock markets, be it investors, financial advisors, industry experts and others indulged in the process of asset management or portfolio construction. This study can act as an aid towards informed investment decisions by analysing the vulnerability of investors associated with emotional biases.
... However, given the fact that legal norms are means of directing human behavior by setting specific normative standards, they have important implications for further development of EAL in the direction of incorporating behavioral insights and the gradual emergence of Behavioral Law and Economics (abbr. BL&E) (Zamir, Teichman, 2018). ...
This chapter examines the empirical methods applicable in Criminology, Economic Analysis of Law, and the law embodied in the form of algorithms. The first part of the paper explores the empirical research methods used in Criminology. Focusing on the fundamental features of criminological methodology, the chapter elaborates on fundamental and applied research. The second part focuses on interdisciplinary methodology applicable in the field of Economic Analysis of Law (EAL), and examines the accompanying controversies and challenges generated by the development of behavioral research that has fundamentally changed the findings of the EAL. The third part elaborates on the importance of empirical data in the context of law as an algorithm and the “new trichotomy” reflecting the nature of data: text-driven law, data-driven law, and code-driven law. The trichotomy emerges as a result of an attempt to transform legal norms into machine-readable algorithms, as well as to ensure the application of these modalities in the legal context. The authors discuss the importance of empirical methods in law and the “extension” of standard legal methodology.
... 1124-1131. On the contrary, it suffers from "bounded rationality" and is subject to various cognitive biases (Gerd, 2020;Simon et al., 1992;Zamir and Teichman, 2018). In other words, man is influenced in his purchasing choices by contingent and environmental factors, life experiences, and, above all, emotions (Fabris, 2010). ...
The Regulation (EU) 2016/679 on the protection of natural persons regarding the processing of personal data (GDPR) is one of the key fundamental pieces of European legislation to protect human rights and freedoms. However, the development of AI systems that are capable of collecting and processing large amounts of data and predicting user habits and emotional states has affected traditional legal categories and tested their resilience. This paper assesses the limits of the current formulation of the GDPR which does not take expressly into account the category of inferred data as a special category of data. Furthermore, it questions whether the toolbox put in place by the GDPR is still effective in protecting data subjects from practices such as neuromarketing and eye-tracking systems. It shows that it is certainly the essential starting point, but that, on the other hand, cannot be spared criticism. For this, in the recent years, the European legislator has adopted further legislations including, in particular, the Digital Services Act (DSA) and the Artificial Intelligence Act (AIA). Although representing a step forward in protection against such technologies, they each have critical aspects that need to be considered.
... Behavioural finance is developed as a distinct discipline that tries to work on the causes of stock market anomalies (Zamir & Teichman, 2018) by mitigating them and clarifying them so that investors make informed investment decisions. It moreover, facilitates finding reasons that an investor uses for tailor-made investment solutions depending on his age, income, education, gender, information about security, and peer behaviour (Badola & Joshi, 2022). ...
The stock market is a crucial aspect of India's financial market and the world's economy, which results in massive investment performances. In the fast-moving financial scenario, traditional finance is incapable of explaining the irrationality of an investor. The investors are irrational and are influenced by irregularities in the financial market. The current research focuses on the effect of behavioural biases on the investment decision-making process among individual investors in India. This article is driven by conducting a survey on 540 individual investors of India who participate in one or the other form in the Indian stock market. An empirical study by nature, the analysis of the study supports evidence establishing the adverse nature of behavioural biases affecting investment analysis and further their decision-making. The research implies a statistically significant association between behavioural biases and investment-related decisions. The results revealed a substantial impact of the behavioural biases affecting the investment decisions of the individual investors, namely, Loss aversion bias, Status quo bias, and Optimism bias. The results also exhibited that Loss Aversion bias had the maximum impact on the investment decision-making of an Indian individual investor. Key-takeaways: 1. Emergence of behavioural finance. 2. Existence of behavioural biases among individual investors. 3. Effect of behavioural biases in investment decision-making.
... Farmer and Pecorino, 2004), salience (e.g. Friehe andPham, 2020), etc. Zamir (2014) and Robbennolt (2014) and Zamir and Teichman (2018) are good points of entry into this literature, especially when it comes to the impact of loss aversion. ...
In this paper, we investigate how loss aversion affects people’s behavior in private litigation. We find that a loss-averse plaintiff demands a higher settlement for intermediate claims to maintain her threat to proceed to trial following rejection compared to a loss-neutral plaintiff. For larger claims, a loss-averse plaintiff demands a lower offer to increase the settlement probability as loss pains her extra in trial. We also investigate how various policies affect loss-averse litigants’ settlement decisions. Only a reduction in the asymmetry of information about trial odds uniformly leads to higher settlement rates.
... Often, one of the main criteria for selecting an arbitrator is his/her legal knowledge or experience in the relevant business sectors. 29 In contrast, an arbitrator's ability to dissociate himself from cognitive biases or his ability to properly assess the facts are usually unreasonably not considered as criteria for assessing a person's ability to arbitrate a case; (3) arbitration law usually allows to appoint as arbitrator a person with no legal training at all. For example, in disputes with a specific field of expertise, it is often advisable to appoint an expert in that specific field who may not have a legal background. ...
Background: The present article was prompted by the growing influence of artificial intelligence in international arbitration. Artificial intelligence poses a challenge to the arbitration market since its advantages make it inevitable that in the future, it will take over some of the arbitrator’s fact-finding functions. Accordingly, the question arises as to how arbitrators can improve fact-finding and, consequently, maintain their demand in the arbitration market. This article analyses in detail one of the alternatives for such an improvement – a stricter application of the rule on the admissibility of written witness testimony. Objects: The article sets out the following objectives: (1) to uncover why artificial intelligence could be considered a better fact-finder than the arbitrator; (2) to identify how arbitrators apply the rule on the admissibility of written witness testimony in international arbitration proceedings; (3) to justify a different application of the latter admissibility rule that both improves the quality of fact-finding and, accordingly, allows arbitrators to keep pace with artificial intelligence. Methods: The article is grounded in the doctrinal legal research method since it will examine three legal sources: 1) the widely applicable IBA Rules on the Taking of Evidence in International Arbitration; 2) the arbitral tribunal’s awards; (3) legal scholarship. The research additionally uses an economic analysis of law as well as an interdisciplinary approach, which reveals certain psychological phenomena related to decision-making in arbitration. Results and Conclusions: The application of the rule of admissibility of written testimony of a witness in international arbitration leads to various negative consequences in the fact-finding process. For arbitrators to keep pace with artificial intelligence in the fact-finding process and increase their demand in the arbitration market, it is necessary to adopt a stricter approach to the latter admissibility rule. This approach leads to the exclusion rather than the evaluation of written witness testimony in international arbitration proceedings.
Era Society 5.0 merupakan sebuah konsep masyarakat yang mengintegrasikan dunia fisik dan virtual melalui inovasi teknologi seperti kecerdasan buatan (AI), Internet of Things (IoT), serta data besar (big data). Perubahan yang signifikan ini membuka peluang besar bagi perkembangan bisnis, namun juga menimbulkan tantangan yang tidak kalah pentingnya, yaitu bagaimana menjaga etika dan tanggung jawab sosial dalam berbisnis.
This handbook introduces readers to the emerging field of experimental jurisprudence, which applies new empirical methods to address fundamental philosophical questions in legal theory. The book features contributions from a global group of leading professors of law, philosophy, and psychology, covering a diverse range of topics such as criminal law, legal interpretation, torts, property, procedure, evidence, health, disability, and international law. Across thirty-eight chapters, the handbook utilizes a variety of methods, including traditional philosophical analysis, psychology survey studies and experiments, eye-tracking methods, neuroscience, behavioural methods, linguistic analysis, and natural language processing. The book also addresses cutting-edge issues such as legal expertise, gender and race in the law, and the impact of AI on legal practice. In addition to examining United States law, the work also takes a comparative approach that spans multiple legal systems, discussing the implications of experimental jurisprudence in Australia, Germany, Mexico, and the United Kingdom.
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 reasons are expected to foster more deliberative thinking and stricter adherence to legal norms. Several prior studies have investigated the influence of judicial reason‐giving on judges' vulnerability to cognitive and other biases. But none have examined the effect of reason‐giving on the inclination to deviate from formal legal rules in cases where there is a notable tension between the legal rules and the equities of the case in question (“hard cases”). This article reports on four novel, pre‐registered experiments designed to test this important issue. The experiments also explored (1) the extent to which a precedent where the court deviated from the formal rule in a hard case affects the ruling in a subsequent “easy case” (one that lacks such tension)—and how reason‐giving influences this effect, and (2) the extent to which a precedent where the court followed the formal rule in an easy case affects the ruling in a subsequent hard case—and how reason‐giving influences this effect. The article discusses the policy implications of the findings and avenues for future research.
Proactive law focuses on preventing future problems and promoting desirable outcomes through the application of law. This article argues that framing proactive law as a systemic approach opens up the possibility for developing a proactive legal theory and solutions using insights from various applications of systems thinking, which is an aspect currently missing from proactive law research. The article introduces the framework of systems intelligence (SI), a practically oriented philosophy for making positive systemic interventions, and discusses its promises and challenges in building proactive law competence. The SI framework is used to illustrate how formalistic, legal-centric and problem-focused practices of law tend to create systemic “reactive-law generators” that may contribute to reproducing the problems they were initially designed to solve. The paper argues that understanding the mechanisms of the reactive-law generators and mitigating their negative effects should be the focus of proactive law research and suggests that systems intelligence philosophy, as well as other systems-awareness building methods, such as visual and co-creative design techniques, can provide strategies and tools to support this work.
In the course of this study the author briefly presents some of the major issues raised by the prospect of artificial intelligence (AI) development in the field of civil law. Firstly, problems posed by possible AI agents acting for a natural or legal person principal are analysed, with the conclusion that as of yet liability for damage caused by the AI both to the parties of the juridical act concluded by the artificial agent, and to any third parties remains with the owner or operator of the AI, with all the injustices this situation entails. Secondly situations of liability for damage caused by use of an AI system for aiding decision-making are presented. It is shown that liability gaps exist in such situations due to lack of regulation. Thirdly the possibility of AI held (mostly non-pecuniary) intellectual rights is analysed, which in the light of current regulation and recent foreign case law seems excluded. Finally, the possibility of granting legal personality to AI systems is raised as a possible solution to the aforementioned dilemmas. It is shown that this would be only an apparent solution, while legal personality for AI would entail greater risks, and is therefore to be avoided. It is concluded that further research and regulation may be necessary to resolve the problems that were identified.
This chapter offers a synthesis of the employed law and economics methodology and provides an overview of the concepts of rationality, risk-aversion, transaction cost phenomena and investigates the nature of economic reasoning. It also offers a brief historical narrative of the employed methodology and investigates the relationship between the positive and normative analysis. Moreover, this chapter also provides a brief summary on the rational and irrational human decision-making process, maximization of utility and welfare, on notion of behavioural law and economics and offers a general implication and evidences of boundedly rational and non-rational human behaviour.
Hukum Tata Negara adalah disiplin ilmu yang mengkaji struktur kenegaraan, hubungan antar organ negara, dan interaksi antara negara. Seperti yang dapat dilihat dari awal kemerdekaan hingga saat ini, HTN di Indonesia memiliki sejarah yang cukup panjang. Dari waktu ke waktu, HTN tidak tetap sama tanpa adanya perubahan sama sekali. Tujuan utama dalam penelitian ini adalah untuk memahami bagaimana perkembangan HTN, implikasi dan dampak dari perkembangan HTN di era modern. Penelitian ini menggunakan metode literatur reviuw, yaitu dengan menganalisis dari beberapa artikel dengan tujuan untuk memahami perkembangan, implikasi, dan dampak perkembangan dari HTN di era modern. Penulisan dilakukan dengan ruang lingkup hukum, teori, dan dasar UUD 1945 yang berhubungan dengan HTN serta perkembangannya di Indonesia. Hasil penelitian menunjukkan bahwa perkembangan sejarah HTN di Indonesia tidak luput dari Undang-undang yang dipergunakan pada setiap masa. Mekanisme pemerintahan di setiap masa Undang-Undang Dasar yang dipergunakan pada setiap masa tidak sepenuhnya sama dengan yang lainnya. Penelitian ini menyoroti perlunya kolaborasi interdisipliner dalam menelaah dan mengembangkan HTN untuk mendukung tantangan kontemporer ketatanegaraan.
The aim is to understand evidence and proof, and thereby ensure more accurate factfinding. A possible route to that end is probability theory. The traditional probability with which we are all familiar is actually built on assumptions that are much less familiar. Its logical basis assumes bivalence, so that everything is either true or false and so that the probabilities of truth and falsity add to one. This assumption leads inevitably to all the logical problems we encounter when using probability to explain factfinding, problems such as the law’s strange willingness to accept weak evidence on both sides and the seemingly asymmetrical burden put on plaintiffs to prove a whole series of elements. After critiquing all of probability’s problems, this chapter, whose length merits a separate Analysis of its sections, concludes that probability theory is not the way to understand evidence and proof.
Section 3.1: Traditional probability systems are built on bivalent logic, with an excluded middle, so that any proposition must be either true or false. The systems are additive in the sense that the chances of truth and falsity add to one. The most useful of those systems for factfinding is subjective probability, which relies on the image of the factfinder’s willingness to bet on the disputed fact. Section 3.2: However, the use of any system of traditional probability for factfinding runs into six major problems, which all result from its failure to account for epistemic uncertainty: resorting to an unrealistic way to express how humans measure proof; fumbling in its advice when there is weak evidence on both sides; allowing the argument to be made that infinite possibilities prevent proving anything to be more likely than not; lacking accurate tools for combining uncertain evidential items or found facts; creating the appearance of asymmetries in the treatment of plaintiffs and defendants; and failing conceptually to capture what we intuitively think of as adequacy of legal proof. Section 3.3: Law professors also anguish over, or revel in, the use of naked statistical evidence and its resulting paradoxes, such as finding a bus company liable for an injury solely because it owns 80% of the buses running that route. Although there are hazards of improper use of mathematics in evidence, statistical evidence is not unique in nature. And in the law’s treatment of statistical evidence, there is no real logical problem. Section 3.4: Over the decades, the problems of traditional probability have become obvious to theoreticians, leading some of them to alter probability in ways that account for epistemic uncertainty. They have produced a variety of dazzling but clumsy ways for probability to do what multivalent logic does easily and clearly. These ways include so-called logical, imprecise, and inductive probability theories.
This chapter provides a concise exploration of the principles and methodology underpinning the interdisciplinary field of law and economics. The chapter delves into the fundamental tenets of law and economics, emphasizing its roots in neoclassical economics, and examines how economic analysis may assist in increasing the efficiency of law and legal norms in terms of the desired economic outcomes. That includes brief explanations of efficiency, utility, and rational choice theory, which serve as the bedrock for analyzing legal systems and policies. Moreover, this chapter explains standard law and economics methodological tools used to evaluate legal rules and institutions, such as cost-benefit analysis, incentive alignment, and economic modelling in assessing the impacts of legal regulation. Through provided theoretical explanations, readers may gain insights into how law and economics inform and affect legal decision-making, offering a valuable lens through which to view (patent-related) legal issues and policies.
This chapter will examine and assess to what extent corruption is a rational choice based on a cost–benefit calculation and/or a more subtle process where incentives, automatic thoughts and social preferences impact on how we act in specific circumstances. I start by highlighting the conventional economic approach to corruption and how this view of human behaviour resonates within and across the broad church of criminology in explaining crime and corruption. I then assess the application and usefulness of behavioural economics and incentives, automatic thoughts and social preferences, customs, conventions and emotions on how we behave. Then, I explain why it is rational for individuals in corrupt institutions to remain silent and highlight the importance of structure, context and notions of professional and personal legitimacy to explain how and why silence occurs and manifests into a ‘wall of Silence’ in institutions and allows corruption to continue, often unabated.
The book Behavioral Law and Economics. co-authored by Eyal Zamir and Doron Teichman, was originally published in English by Oxford University Press in 2018.[1] In this book review, we will focus on the Serbian translation of this monumental work in the field of behavioral law and economics.[2] This book is part of a corpus of books published within the ERASMUS+ project “Public Policy Making and Analysis (PPMA)”, which was funded by the European Commission and aimed at lifelong learning in the field of public policies in Serbia.[1] Eyal Zamir, Doron Teichman. (2018). Behavioral Law and Economics. Oxford University Press.[2] Ejal Zamir, Doron Tajhman. (2022). Biheviorističko pravo i ekonomija, [Behavioral Law and Economics], Dosije studio Beograd, Univerzitet u Novom Sadu, SeCons–grupa za razvojnu inicijativu, Beograd (662 str.).
Oliver Williamson has coined the term “fundamental transformation.” It captures the following situation: before they strike a deal, buyers and sellers are protected by competition. Yet, thereafter, they find themselves in a bilateral monopoly. With common knowledge of standard preferences, both sides would conclude the contract regardless if its expected value exceeds their outside options. We run an experiment to test whether additional behavioral concerns deter mutually beneficial trade. We test four concerns: If the risk materializes, another individual makes a windfall profit; she does so by intentionally exploiting another individual; the exploited individual may be her assigned partner; the individual that is let down is her contractual partner, and hence has voluntarily exposed herself to this risk. Behavioral effects are heterogeneous. About a quarter of participants from a standard student subject pool exhibit the hypothesized additional deterrent effect. This fraction is bigger than a third if participants interact with a random partner from somewhere in the world.
Commercial practices that exploit consumer behavioural biases (behavioural exploitation) are an increasingly prevalent issue in online choice architectures. EU policymakers have started to expressly regulate such practices. What remains unclear about this type of regulation is when an online choice architecture exploits biased consumers. What is the legal meaning and significance of exploitation in the digital environment? Even though the concept of exploitation is frequently used in scholarship concerning behavioural exploitation such as “dark patterns”, it is rarely defined. The concept’s normativity is mostly ignored, remains underdeveloped, and lacks solid foundations. This Article aims to close this gap by developing a theory of exploitation for (behavioural) consumer law in the EU that applies to online choice architectures and unfair commercial practices in general. The Article eschews welfare analysis and instead relies on the philosophical discourse on exploitation theory. Even though this discourse is mostly ignored by the literature, the Article submits that this analytical framework fits better with the existing goals and scheme of EU consumer law compared to an approach to legal analysis that is driven by promoting consumer welfare through market efficiency. Ultimately, the Article defends the autonomy theory of exploitation and contends that regulating behavioural exploitation in online choice architectures means regulating for autonomy.
El artículo examina la estrategia de regulación comercial del cannabis recreativo y su posible aplicación en Chile. Propone que los tributos regulativos constituyen un elemento central para que la estrategia sea efectiva y que, para su adecuado diseño, la dogmática tributaria debe considerar los presupuestos económicos de este tipo de tributación, los conocimientos empíricos que proporcionan diversas disciplinas relacionadas con la materia y, en especial, su incidencia en el mercado ilegal de cannabis.
The aim of this paper is to analyze the problem of labor market discrimination through the methodology of economic analysis of law, as a special discipline, as well as the doctrinal approach, focusing on the legislative framework in the concrete filed in the Republic of Serbia. The main research question is do we really need anti-discrimination law in the field of labor and employment, or we can use only free market mechanisms to eliminate employers who discriminate employees who are in the labor market and/or the labor force which pretend to enter the market. Economic analysis of law starts from the premise that employers are rational players at the market who want to maximize their profits, and the only important thing is the productivity of employees, not their personal characteristics which do not affect their labor performance (productivity). Although this reasoning sounds rational, we witness that discrimination in the labor market has been persisting and governments intervene with anti-discrimination legislation and public policies, as well as special institutional solutions, trying to suppress it and support economic development and social inclusion of marginalized social groups. The author’s special attention in the paper is on the two economic models of discrimination, Becker’s Taste for Discrimination and Statistical Discrimination Model, which will explain the necessity of anti-discrimination law in the field of labor and employment. Concurrently, the focus will be on the Serbian legal framework and the importance of the impact assessment, as a tool for improving the quality of legislation and policies in the concept of the respect the principle of equality and non-discrimination.
Consumer choice and decision making are often influenced by various covert and inadvertent factors in day-to-day lives, also known as externalities. Prior studies and economists have always stressed and based their models on the ‘assumption’ that consumers are perpetually rational in their decision making and are adept at pursuing the source of their satisfaction. But real-life observations paint a contradictory picture. They have an irrational compulsion to keep options open and have as many goods in their basket as possible, as long as it is on or under their budget curve. While measuring their options and calculating their potential opportunity costs, an average consumer oversees the most important opportunity cost them time. By considering their time they spend taking a decision as constant or irrelevant, they fail to take into account the consequences of not deciding and end up being miserable. This study aims to trace the effect of externalities like choice overload, nudges and unconscious bias on consumer choice among Indians students. Further, a relationship has been established between the three externalities after performing PCA after including certain demographic factors. Our findings indicate that the choice paradox in terms of Choice overload, Nudges and Unconscious bias is very much dependent upon the demographic factors of the individuals such as education, gender and number of family members and economic factors such as the household’s income. Further, these dependencies are not uniform. We found that if the individual is a student, then all three types of choice paradox are present.
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 of prosecutors and defense lawyers, although they play a major role, especially in legal systems where prosecutors have a broad discretion in charging decisions, courts' discretion regarding sentencing is constrained, and plea bargains abound. This study directly compares laypersons, law students, and legal practitioners—including prosecutors and defense lawyers—in terms of their attitudes about the criminal justice system and their cognitive biases. It was found that the outcome bias and the anti‐inference bias influenced all groups similarly, but an irrelevant anchor only impacted the decisions of laypersons and law students, and not those of legal professionals. Prosecutors were significantly more inclined to judge a behavior as negligent and reach factual conclusions supporting a conviction. However, the hypothesis that the susceptibility of prosecutors and defense lawyers to cognitive biases would be affected by their role was not borne out. The article considers possible explanations for the reported findings, and discusses their policy implications.
Judicial decision-making, whether by people or artificial intelligence, must be independent and impartial. Independence and impartiality connect all the work of the justice system. And the judgment must contain enough reasoning to make clear that the judge has carefully assessed the evidence and legal submissions and has reached a fair decision supported by the evidence and accurately reflecting the applicable law. We are dealing here, therefore, with the most central issue of jurisdictional activity.
Regarding these introductory key points, the first difficulty for those approaching the issue is to identify what, when and how are the independence and impartiality are to be approached. What about the values and the within this microsystem? It is possible for an adjudicator to be independent and non impartial or else non independent but impartial? And, in addition, what is the relationship between independence and impartiality, and neutrality (if it a relevant point or non-differentiable with impartiality, like in many the jurisdiction)? This last question, of course, requires a full understanding of the nature of neutrality. Again, is it a value,
a principle, a duty, etc.?
There is a debate regarding the relationship between standard and behavioral perspectives of Law and Economics. On the one hand, Behavioral Economics could broaden economic theory by explaining the real world of law, as in the case of legal structures of merit goods and altruism. On the other hand, Behavioral Economics may not be needed to explain legal structures that do not maximize wealth, since standard economic theory is well able to do so.Nevertheless, a comparison of two scientific approaches does not necessarily have to imply selecting one theory over the other; rather, it allows the use of both theories in a complementary manner. This research conceptualizes Law and Economics as a Lakatos research programme and analyzes the relationship between Behavioral Law and Economics and the standard approach. The results reveal that, first, Behavioral Law and Economics explains anomalies that are undetected by standard Law and Economics. The behavioral approach is thus not a substitute for the standard perspective, but rather, the two approaches may be complementary. Second, these two theories of Law and Economics examine different, but complementary, aspects of regulation. This article uses the regulation of transportation network companies to illustrate this issue.
Naar een gedragseconomie van het recht
Behavioral economics builds on insights from behavioural sciences, primarily psychology, and aims to explain the behaviour of (groups of) individuals under conditions of scarcity. It applies an empirical methodology grounded in econometrics and based on experimental research. The authors’ proposition is that behavioural law and economics rooted in experiments is a valuable approach to legal studies that complements pre-existing law and economics. Experiments maximise the opportunity to identify causal links and norms as building blocks of the law as interventions in human behaviour, and hence are well suited in the context of empirical legal studies. The research design menu includes variables such as hypothetical decisions versus actual behaviour, experiments with or without full randomisation, pure or quasi, lab versus field, and natural experiments versus experiments that can be manipulated. Behavioural economics operates under conditions of incentive compatibility and the no-deception principle. In this article, the authors set out a research agenda for behavioural law and economics research, covering private law (consumer and contract law as well as liability and tort law), administrative law, and economic law.
After comparing the preponderance and proportional approaches to adjudication by considering some cases susceptible to being decided in either way, the work develops an in-depth discussion of Lavie's stepwise approach, and points out some major concerns that it poses, namely concerns about conceptual resources, methodology and matters of principle. As to conceptual resources, the work addresses and clarifies what Lavie means by ‘probability’ and ‘gradually increasing steps’; on methodology, it observes that reliance on Beckerian deterrence in this context is not convincing due to its reductionist motivational focus, which has also been challenged empirically by behavioural studies, and to its dismissal of the institutional function of trials; on matters of principle, finally, the work claims that the fundamental changes in the jural positions of claimant and defendant raise very high concerns in terms of the right to a fair trial.
Fifty years ago, the Federal Trade Commission stopped enforcing its fictitious reference pricing guidelines, emphasizing the search qualities of price and the belief that competition would drive out deceptive behavior. Yet this practice of posting false, inflated comparison prices alongside sale prices has proliferated. Building on prior analytic work and the documented effects of reference pricing on search behavior and consumer choice, the authors develop a descriptive model explaining why fictitious reference pricing has spread instead of being extinguished by competition. After summarizing the model with a series of generalizations, the authors consider potential regulatory solutions to the problem. They propose that disclosure of the true normal price charged may be the only solution that could plausibly influence both consumer and firm behavior. Then, based on the existing literature, interviews with practitioners and regulators, an analysis of other nations’ approaches, and the results of a laboratory study of 900 consumers to examine how they integrate “true normal price” information into deal evaluations, the authors develop a set of propositions about the likely effects of requiring firms to disclose recent selling prices for goods, identifying both potential benefits and challenges associated with such a requirement.
This chapter offers an introduction to the theory of banking regulation. It first briefly develops on the functions of the financial system, banking intermediation, and the policy objectives and instruments of financial regulation in general and of banking regulation in particular. After establishing that the key policy objective in banking regulation is preservation of financial stability, the chapter focuses, in more detail, on the instruments which constitute the “bank safety net”. The financial and other (including environmental) risks to which banks can be exposed are then discussed as the basis for prudential measures in banking (authorisation requirements, microprudential banking regulation and supervision, macroprudential policies). The following sections discuss the crisis prevention measures in banking, the crisis management measures (lending of last resort by central banks, banking resolution and deposit guarantee), as well as the institutional relationship among the bank safety net components and the relation with macroeconomic policies.KeywordsFinancial systemBanking intermediationFinancial risksBank safety netPrudential measuresCrisis prevention measuresCrisis management measures
The main goal of a potential plaintiff who initiates a negative expected value dispute is to try to reach an agreement on an out-ofcourt settlement. The paper analyzes the behavior of parties in negative value disputes in the Republic of Serbia. The objective of this paper is to show economic analysis of out of court settlement; 1) in condition of symmetrical information and 2) in condition of asymmetrical information. First of all, we will present the literature regarding this topic using the historical analysis and synthesis method, after that, by using the methods of deduction and induction, descriptive, comparative and other scientific methods, on a case of Republic of Serbia we will show research problem. At the end we will give the results in conclusion.
La ley colombiana determinaba que los padres debían registrar a sus hijos asignándoles como primer apellido el de su padre. En noviembre de 2019, la Corte Constitucional precisó que tal regla viola la igualdad de géneros y permitió a los padres asignar a sus hijos como primer apellido bien sea el paterno o el materno. Este texto investigativo, con metodología basada en teoría de juegos y en modelos del análisis económico de derecho de familia para aplicarlos, lege lata, a las nuevas normas que permiten a los padres negociar entre sí sus derechos de propiedad sobre los apellidos de sus hijos, haciendo énfasis en padres casados o en unión libre. El texto también estudia dicha negociación bajo los modelos de batalla de los sexos y del juego de la gallina. Tal enfoque ofrece nuevas perspectivas no solo sobre los efectos de la reciente jurisprudencia sino también sobre el análisis económico del matrimonio y del derecho de familia. El texto concluye que: la negociación de los apellidos será compleja no por razones legales sino económicas, como el monopolio bilateral existente entre los padres y el ser un apellido un objeto indivisible que no se comercia en un mercado tradicional.
In a book on domestic implementationRestricted jurisdictional regime of the International Criminal Court, exploring the jurisdictional regime of the International Criminal Court matters due to the principle of complementarityPrinciple of complementarity. If cases do not fall within the complementary jurisdiction of the International Criminal Court, States lack a sovereignty-driven interest to enact legislation to avoid future judicial interventions. Restrictions on the jurisdiction of the International Criminal Court can thus affect domestic implementation. This chapter explores the restrictions imposed on the regime of the International Criminal Court regarding the crime of aggression. It chronologically assesses the decisions which were adopted at the Rome ConferenceRome Conference in 1998, the Kampala Review Conference in 2010 and the Assembly of States PartiesAssembly of States Parties in New York City in 2017. The jurisdictional regime following a State referral or proprio motu investigations can be described as being more consensual regarding the crime of aggression. It excludes the territory and nationals of non-States PartiesNon-States Parties, acts of aggression by States Parties that have opted out, and (arguably) the territory and nationals of States Parties which have not ratified the Kampala AmendmentsKampala Amendments. This leaves little of the strengths of territorial jurisdiction, the most basic principle of criminal jurisdiction. It installs a regime for the crime of aggression, which appeared unacceptable to the overwhelming majority at the Rome ConferenceRome Conference. The restrictions increase the dependency from the often-paralyzed UN Security CouncilUN Security Council which is why domestic implementations can reduce the risk of impunity.
In his work, On Law and Justice, Alf Ross sought to explain law in scientific/empirical terms, in terms that would require no recourse to what he called “metaphysics” or “idealism.” The result is a sort of translation of legal rules and official actions into propositions of behavior, predictions of behavior, and shared ideology. The present work raises questions about the tensions within Ross's work(s), and discusses the places where Ross's analysis seems to fall short of its ambitions. In the course of the discussion, the article considers issues relating to legal mistake, explanations of judicial behavior, and different types of normativity.
This study experimentally investigates the role of the origin of victims' resources on the propensity to settle or litigate a dispute. The analysis focuses on victims’ decision to use a costly and uncertain procedure, that is, litigation, to recover money from offenders and on offenders’ decision to hand over what they have taken before litigation starts. The results suggest that although the share of offenders who return money increases once they learn that the victims have had to work to gain their resources, the threat of a costly dispute is stronger than any consideration about the origin of victims’ resources. In this study, the religiosity and gender of decision makers are included among the control variables because it is traditionally debated how these individual features are able to affect’ individuals’ attitudes in conflicts and their resolutions. In particular, gender seems to play a significant role since the main results are driven by female decision makers.
Učebnica predstavuje v koncentrovanej podobe povahu, znaky a vybraných predstaviteľov či predstaviteľky najaktuálnejších podôb právneho myslenia. Prináša tak príležitosť oboznámiť sa s kritickými prístupmi skúmania práva, ktoré prekračujú rámec tradičnej, modernej či dogmatickej právnej vedy. Za týmto účelom sumarizuje pohľady, ktoré podrobujú právo kritickému skúmaniu a prehodnoteniu externým pohľadom z rôznorodých oblastí života spoločnosti, akými sú napríklad postmoderná filozofia, literárne umenie, ekonómia, psychológia a politika (resp. politický rozmer identity). Naznačuje tendencie právnej vedy z prelomu 20. a 21. storočia, ktoré spočívajú najmä v rastúcej fragmentácii, odklone od práva ako ústredného objektu skúmania a posilňovaní interdisciplinárnych možností skúmania práva.
Študentkám a študentom právnických fakúlt sa tak do rúk dostáva charakteristika postmoderných prístupov k právu, hnutia právo a literatúra, hnutia právo a ekonómia, ako aj rôznorodé podoby radikálnych teórií práva (kritické právne štúdie, právny feminizmus a kritická rasová teória) vrátane lesbickej teórie práva a queer teórií práva.
Účelom učebnice je zreteľne, prehľadne a vo vzájomnej nadväznosti popísať základné znaky zvolených prístupov a hnutí právneho myslenia. Študentky a študenti majú možnosť poznať nielen ich účel a ideové/ideologické nastavenie, ale najmä ich má viesť k zhodnoteniu významu a výsledkov alternatívnych (hoci aj kritických) prístupov a hnutí právnej vedy k súčasným podobám práva a jeho reálnym prejavom.
Zdroj a viac info na: https://www.knihyleges.cz/sucasne-podoby-pravnej-filozofie
In order to apply and demonstrate the methodological principles of economics, we first turn to the field of public finance. We begin with this field not only because of the significance of public finance in the modern political system, but also because of the clear interest that economists have always shown in this issue. An analysis of the state budget must consider expenditures and focus in even greater detail on revenue (e.g. taxes and fees, national debt).
This book introduces a critical perspective on public law, the area of law that governs relationships between individuals and the state or its various government institutions and between different government institutions within the state. This perspective originates outside the field of public law—indeed, outside the framework of law entirely. This approach adopts the tools and methods of economics to interpret traditional questions of public law and is thus described as an economic analysis of public law. Because of its focus on the state and decision-making, it can also be characterised as a component of public choice theory. In an analysis of public law, the economic theory of public choice provides valuable insight into collective decision-making processes.
Due recognition of the cognitive shortcomings of judges is indispensable to any serious account of judicial behavior. This chapter investigated how the common law could have emerged efficient, incrementally, and without centralized guidance, in spite of the biases and heuristics of judges and litigants. It demonstrates that the system of precedent contains a built-in cognitive structure that can mitigate certain judicial cognitive failures, and correct inefficient legal doctrines that have resulted from biased judicial decision-making.
Behavioral public choice economics is the synthesis of two revolutions: first, the breakthrough of public choice economics that voting and the market are not two isolated universes, but merely two modes of decisionmaking by the same human actors that should be brought within a single framework of analysis; and second, the watershed rejection by behavioral economics of the unrealistic neoclassical homo economicus model shared by conventional public choice and standard public economics.
Why do lawyers in some jurisdictions continue to ‘automatically’ exclude the 1980 UN Convention on Contracts for the International Sale of Goods (CISG) in their choices of law for international sales contracts? Why do lawyers in other jurisdictions approach the decision very differently? Why do standardized commodity contracts universally opt out of the CISG? This article identifies the key reasons for opting in or out of the CISG across jurisdictions and markets, and then turns to economics and psychology in order to expose the underlying causes for choices of law for international sales contracts. A number of perspectives are utilized within this analysis: neoclassical economics, including agency costs, information costs, moral hazard and market distortion; rational decision making within game theory frameworks under different jurisdictional background conditions; behavioural economics, including notions of path dependence and satisficing; psychological and behavioural perspectives including heuristics and group polarization; and finally, the forces behind institutionalization of choices of law and network effects. The breadth of this approach provides new insight into the reasons for choices of law, and enables a thorough analysis of current and future trends in exclusion of the CISG. The author concludes that choices of law in jurisdictions that presently overwhelmingly favour ‘automatic’ exclusion of the CISG will inevitably change.This paper is an extended version of an earlier paper published in the Vindobona Journal of International Commercial Law & Arbitration. It contains extended analysis of the psychological & economic aspects, and new sections dealing with the commodities trade sector.