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Behavioral Law and Economics

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  • Christine Jolls
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    Abstract

    Behavioral economics has been a growing force in many fields of applied economics, including public economics, labor economics, health economics, and law and economics. This paper describes and assesses the current state of behavioral law and economics. Law and economics had a critical (though underrecognized) early point of contact with behavioral economics through the foundational debate in both fields over the Coase theorem and the endowment effect. In law and economics today, both the endowment effect and other features of behavioral economics feature prominently and have been applied in many important legal domains. The paper concludes with reference to a new emphasis in behavioral law and economics on "debiasing through law" - using existing or proposed legal structures in an attempt to reduce people's departures from the traditional economic assumption of unbounded rationality.

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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12879.

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    Date of creation: Jan 2007
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    Handle: RePEc:nbr:nberwo:12879

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    Cited by:
    1. Bigoni, Maria & Le Coq, ChloƩ & Fridolfsson, Sven-Olof & Spagnolo, Giancarlo, 2008. "Risk Aversion, Prospect Theory, and Strategic Risk in Law Enforcement: Evidence From an Antitrust Experiment," Working Paper Series in Economics and Finance 696, Stockholm School of Economics.
    2. C. Fritz Foley, 2008. "Welfare Payments and Crime," NBER Working Papers 14074, National Bureau of Economic Research, Inc.

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