THE BEHAVIORAL APPROACH TO ECONOMIC ANALYSIS OF LAW

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THE BEHAVIORAL APPROACH TO ECONOMIC ANALYSIS OF LAW

Journal Title: Економічна теорія та право - Year 2015, Vol 4, Issue 23

Abstract

Problem setting. Analysis of effectiveness of legal acts, opportunities of passing the acts, and real application are of considerable importance. Recent research and publications analysis. System penetration of principles and methods of economic analysis into the field of law are related to scientific papers of А. Alchian, H. Demsetz, G. Calabresi, R. Coase, and G. Becker. A coherent and organic view of the field of law and economics was presented in papers of R. Posner, who had analyzed a wide range of legal issues on the basis of economic instruments. Domestic scientists (O. Volovyk, O. Hrytsenko, V. Dzhun, etc.) examine the conceptual framework of economic analysis of law, its methodological potential, and prospects of development. Paper objective. The article objective is to determine methodological prospects of application of the behavioral approach to economic and legal research. Paper main body. The behavioral economics examines further deviations from traditional economic assumptions, which are as follows: bounded rationality, which stipulates errors of judgement and deviations from the theory of expected utility; bounded willpower and an effect of discounting that result in providing current interests with more considerable preferences, even those interests, which do not respond to long-term goals; a bounded self-interest, which stipulates more complicated motivation of economic be havior. One of the most powerful cognitive displacements, which are of significant importance for economic analysis of law, is an endowment effect. Availability of this effect calls the theory of Coase into question. Conclusions of the research. The important conclusion of the behavioral economics is an opportunity to predict, take into account in economic analysis, and try to overcome cognitive errors owing to institutions. In the field of behavioral law and economics, the concept of «debiasing through law», i.e. using existing or proposed legal structures in an attempt to reduce people’s departures from the traditional economic assumption of unbounded rationality, is increasingly popular nowadays. Numerous experiments prove that humans make not the best decisions because of peculiarities of their nature under particular situations. Thus, normative attitudes of a society should «correct» an individual choice, help to eliminate or decrease errors in judgements, and incent individuals to make normatively appropriate decisions, not directly restricting a choice. The main abstract for the article Аbstract: the article analyzes and summarizes theoretical and methodological frameworks of economic analysis of law. The author has determined basic principles of the behavioral approaches to economic and legal research. The author has indicated the sense of the concept of «debiasing through law», which considers legal norms as a way to correct choices of individuals in favor of normatively appropriate decisions desired by a society.

Authors and Affiliations

Ольга Олександрівна Набатова

Keywords

EP ID EP221880
DOI -
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