Behavioral Law and Economics

This exciting volume marks the birth of a new field--a field that studies law with reference to an accurate rather than a crude understanding of human behavior. Behavioral Law and Economics presents new findings in cognitive psychology and behavioral economics which show that people are frequently both unselfish and over-optimistic; that people have limited willpower and limited self-control; and that people are boundedly rational in the sense that they have limited information-processing powers and frequently rely on mental short-cuts and rules of thumb. Understanding this kind of human behavior has large-scale implications for the analysis of law in areas including environmental protection taxation and tax compliance constitutional law voting behavior punitive damages for civil rights violations labor negotiations and strikes and corporate finance. Behavioral Law and Economics offers many new insights into these fields and suggestions for legal reform. With a better knowledge of human behavior it is possible to predict the actual effects of law to see how law might actually promote society''s goals and to reassess the questions of what law should be doing.