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Pricing Legal Options: A Behavioral Perspective

Author

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  • Bar-Gill Oren

    (New York University School of Law)

Abstract

Many legal rules can be interpreted as creating options. Option pricing is thus important for understanding the ex ante effects of these rules. And, recognizing that individuals, whose behavior the law aims to influence, are imperfectly rational, a behavioral option pricing model is a potentially helpful tool for legal policy. This paper develops such a model and applies it to a series of legal problems in tort law, contract law, corporate law and criminal law.

Suggested Citation

  • Bar-Gill Oren, 2005. "Pricing Legal Options: A Behavioral Perspective," Review of Law & Economics, De Gruyter, vol. 1(2), pages 204-240, September.
    • Handle: RePEc:bpj:rlecon:v:1:y:2005:i:2:n:2
    DOI: 10.2202/1555-5879.1016
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    References listed on IDEAS

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    Cited by:

    1. Bruno Deffains & Marie Obidzinski, 2009. "Real Options Theory for Law Makers," Recherches économiques de Louvain, De Boeck Université, vol. 75(1), pages 93-117.
    2. Julia Shamir & Noam Shamir, 2021. "Third-party funding in a sequential litigation process," European Journal of Law and Economics, Springer, vol. 52(1), pages 169-202, August.

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