The Law and Economics of Irrational Behavior - Paperback

by Francesco Parisi (Editor), Vernon L. Smith (Editor)

This collection of essays explores the most relevant developments at the interface of economics and psychology, giving special attention to models of irrational behavior, and draws the relevant implications of such models for the design of legal rules and institutions. The application of economic models of irrational behavior to law is especially challenging because specific departures from rational behavior differ markedly from one another.

Furthermore, the analytical and deductive instruments of economic theory have to be reshaped to deal with the fragmented and heterogeneous findings of psychological research, turning towards a more experimental and inductive methodology. This volume brings together pioneering scholars in this area, along with some of the most exciting developments in the field of legal and economic theory. Areas of application include criminal law and sentencing, tort law, contract law, corporate law, and financial markets.

Front Jacket

This collection of essays explores the most relevant developments at the interface of economics and psychology, giving special attention to models of irrational behavior, and draws the relevant implications of such models for the design of legal rules and institutions. The application of economic models of irrational behavior to law is especially challenging because specific departures from rational behavior differ markedly from one another.
Furthermore, the analytical and deductive instruments of economic theory have to be reshaped to deal with the fragmented and heterogeneous findings of psychological research, turning towards a more experimental and inductive methodology. This volume brings together pioneering scholars in this area, along with some of the most exciting developments in the field of legal and economic theory. Areas of application include criminal law and sentencing, tort law, contract law, corporate law, and financial markets.

Back Jacket

Progressive law scholars will want to read this lively, wide-ranging, and fun collection. The impressive cast of contributors keeps a clear eye on how law can be informed by formal models of limits on rationality. --Colin F. Camerer, Axline Professor of Business Economics, California Institute of Technology

Author Biography

Francesco Parisi is Professor of Law and Director, Law and Economics Program, George Mason University School of Law. He is co-editor of The Law and Economics of the European Union (2003), Economic Foundations of Private Law (2002), and Law and Economics (1997). Vernon Smith is Nobel Laureate in Economics, 2002, and Professor of Economics and Law, George Mason University.