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European Journal of Law and Economics

, Volume 48, Issue 1, pp 9–27 | Cite as

Mistaken about mistakes

  • Kathryn ZeilerEmail author
Article
  • 101 Downloads

Abstract

Theoretical work in behavioral economics aims to modify assumptions of standard neoclassical models of individual decision-making to better comport with observed behavior. The alternative assumptions fall into at least two categories: non-standard preferences and psychological mistakes. Applications of behavioral economics models in law, however, tend to assume that deviations from standard neoclassical models are meant to build in psychological mistakes that produce regrettable choices. Often follow-on policy prescriptions suggest interventions that either help individuals choose correctly or go further to substitute the “correct” choices for those that mistake-prone individuals might choose in error. Such policy prescriptions are ill suited in cases where the applied behavioral economics model assumes non-standard preferences as opposed to psychological mistakes. This essay provides examples of models in each category and examples of mistaken applications of models that assume non-standard preferences rather than psychological mistakes. It also suggests ways to avoid errors when applying behavioral economics theories in law.

Keywords

Behavioral economics Legal scholarship Rationality Psychological mistakes 

JEL Classifications

D01 D15 D81 D91 K10 

Notes

Acknowledgements

Thanks to Eyal Zamir and all conference participants for helpful comments and suggestions. Special thanks go to my colleague Wendy Gordon for insightful comments and for suggesting the title. Thanks also to Megan Smith-Mady and Erica Puccetti for excellent research assistance.

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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Boston University School of LawBostonUSA

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