Behavioral Law and Economics

This exciting volume marks the birth of a new field one which attempts to study law with reference to an accurate understanding of human behavior. It reports new findings in cognitive psychology 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 behavior has large-scale implications for the analysis of law in areas including environmental protection taxation constitutional law voting behavior punitive damages for civil rights violations labor negotiations and corporate finance. With a better knowledge of human behavior it is possible to predict the actual effects of law to see how law can promote society''s goals and to reassess the questions of what law should be doing.