Behavioral Law and Economics

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.

Identifying the Effects of the Americans with Disabilities Act Using State-Law Variation: Preliminary Evidence on Educational Participation Effects

The Americans with Disabilities Act of 1990 (ADA) broadly prohibits discrimination on the basis of disability in employment and other settings. Several empirical studies have suggested that employment levels of individuals with disabilities declined rather than increased after the ADA's passage. This paper provides a first look at whether lower disabled employment levels after the ADA might have resulted from increased participation in educational opportunities by individuals with disabilities as a rational response to the ADA's employment protections. The main empirical finding is that individuals with disabilities who were not employed in the years following legal innovation in the form of the ADA were more likely than their pre-ADA counterparts to give educational participation as their reason for not being employed. This preliminary evidence suggests the value of further study, with better education data, of the relationship between the ADA's enactment and disabled participation in educational opportunities.

Disaggregating Employment Protection: The Case of Disability Discrimination

Studies of the effects of employment protection frequently examine protective legislation as a whole. From a policy reform perspective, however, it is often critical to know which particular aspect of the legislation is responsible for its observed effects. The American with Disabilities Act (ADA), a 1990 federal law covering over 40 million Americans, is a clear case in point. Several empirical studies have suggested that the passage of the ADA reduced rather than increased employment opportunities for individuals with disabilities. To the extent this is true, it is crucial to credibly disentangle the different features of this complex and multi-faceted law. Separately evaluating the distinct aspects of the ADA is important not only for determining how the law might best be reformed if some aspects of it produce negative employment effects, but also for improving our understanding of the potential consequences of ADA-like provisions in race and other civil rights laws. This paper exploits state-level variation in pre-ADA legal regimes governing disability discrimination to separately estimate the employment effects of each of the ADA's two primary substantive provisions. We find strong evidence that the immediate post-enactment employment effects of the ADA are attributable to its requirement of "reasonable accommodations" for disabled employees rather than to its potential imposition of firing costs for such employees. Moreover, the pattern of the ADA's effects across states suggests, contrary to widely discussed prior findings based on national-level data, that declining disabled employment after the immediate post-ADA period reflects other factors rather than the ADA itself.

Privacy and Consent Over Time: The Role of Agreement in Fourth Amendment Analysis

Like many legal systems around the world, the American system protects the right to privacy, or, as Samuel Warren and Louis Brandeis famously put it, the right to be let alone. Although Warren and Brandeis\u27s formulation has profoundly influenced privacy law, a moment of thought reveals that most of us do not wish to be entirely let alone. An individual wholly surrounded by a cocoon of solitude—for instance, the Russian mathematician whodeclined the equivalent of a Nobel Prize because he preferred to remain secluded in his mother\u27s St. Petersburg home—is a rarity (and usually at least somewhat of an oddity). Although we do not want our homes or property to be open for inspection at all times we usually want the police to be able to come in and take a look when we have been victims of a burglary

Behavioral Economics Analysis of Redistributive Legal Rules

This Essay offers a behavioral economic analysis of redistributive legal rules. Redistributive legal rules are rules chosen for their effects in shifting wealth from high-income to low-income individuals(progressive redistribution). The desirability of such rules has been the subject of intense debate within the legal community. Many law and economics scholars have urged that legal rules be chosen solely with an eye towards Kaldor-Hicks efficiency (which I will call simply efficiency for the remainder of this Essay); these scholars often urge that distributional considerations be addressed (if they are to be addressed at all) exclusively through the tax and welfare systems. On this view, distributive goals do not provide a basis for choosing an inefficient legal rule-although they might, it seems, provide a basis for choosing between two efficient rules. Other legal scholars have argued that the selection of legal rules should be informed by distributional considerations even at the expense of efficiency. I will calla rule redistributive if it makes such a trade-off between distributive objectives and efficiency

The Real Justice Scalia

For Justice Scalia, neither people nor ideas were means for producing a desired objective or goal; rather they were always ends in themselves. Day in and day out, he actively modeled a form of regard and authenticity that became an organizing personal example for me and many of his other wildly devoted law clerks, even those who, as in my case, rued his substantive views

Debiasing through Law

In many settings, human beings are boundedly rational. A distinctive and insufficiently explored legal response to bounded rationality is to attempt to "debias through law," by steering people in more rational directions. In many important domains, existing legal analyses emphasize the alternative approach of insulating outcomes from the effects of boundedly rational behavior, often through blocking private choices. In fact, however, a large number of actual and imaginable legal strategies are efforts to engage in the very different approach of debiasing through law by reducing or even eliminating people's boundedly rational behavior. In important contexts, these efforts to debias through law can avoid the costs and inefficiencies associated with regulatory approaches that take bounded rationality as a given and respond by attempting to insulate outcomes from its effects. This paper offers a general account of how debiasing through law does or could work to address legal questions across a range of areas, from consumer safety law to corporate law to property law. Discussion is also devoted to the risks of government manipulation and overshooting that are sometimes raised when debiasing through law is employed.