CINEMA 7 Lecture Notes - Lecture 20: Prospect Theory, Rational Agent, Rationality
Document Summary
Jolls et al (1998) a behavioural approach to law and economics. In law, challenges to rational actor assumptions are less common. Goal: advance approach to economic analysis of law that is informed by more accurate conception of choice, reflecting a better understanding of human behaviour and its wellsprings. Behavioural economics allows to model and predict behaviour relevant to law with the tools of traditional economic analysis but with more accurate assumptions about human behaviour and more accurate predictions and prescriptions about law. Why does law take the form that it does (2) prescriptive: how law might be used to achieve specific ends, such as deterring socially undesirable behaviour (3) normative, assess more broadly the ends of the legal systems. In conventional economic analysis: same like prescriptive analysis, since the goal of legal system is to maximize social welfare. Behavioural economics: ends of legal system are more simple, people revealed preferences are less certain ground on which to build paternalism.
