A BEHAVIORAL-APPROACH TO LAW AND ECONOMICS

Economic analysis of law usually proceeds under the assumptions of neo classical economics. But empirical evidence gives much reason to doubt these assumptions, people exhibit bounded rationality, bounded self-i nterest, and bounded willpower This article offers a broad vision of h ow law and economics analysis may be improved by increased attention t o insights about actual human behavior. It considers specific topics i n the economic analysis of law and proposes new models and approaches for addressing these topics. The analysis of the article is organized into three categories. positive, prescriptive, and normative. Positive analysis of law concerns how agents behave in response to legal rules and how legal rules are shaped. Prescriptive analysis concerns what r ules should be adopted to advance specified ends. Normative analysis a ttempts to assess more broadly the ends of the legal system: Should th e system always respect people's choices? By drawing attention to cogn itive and motivational problems of both citizens and government, behav ioral law and economics offers answers distinct from those offered by the standard analysis.