Vandenberghe, Ann-Sophie --- "Behavioral Approaches to Contract Law" [2011] ELECD 136; in De Geest, Gerrit (ed), "Contract Law and Economics" (Edward Elgar Publishing, 2011)

Book Title: Contract Law and Economics

Editor(s): De Geest, Gerrit

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847206008

Section: Chapter 19

Section Title: Behavioral Approaches to Contract Law

Author(s): Vandenberghe, Ann-Sophie

Number of pages: 23

Extract:

19 Behavioral approaches to contract law
Ann-Sophie Vandenberghe


1. Introduction
Legal scholars have increasingly used existing scholarship in both cognitive
psychology and behavioral economics, which suggests that human behav-
ior often deviates from rational choice in systematic and predictable ways,
to explain legal phenomena and to argue for legal reforms. This behavioral
approach to law has infiltrated the legal literature in such diverse areas as
tax law, administrative law, environmental law, criminal law, civil pro-
cedure, corporate securities law, tort law, and contract law (Langevoort
1998). There now exists an increasingly rich literature which attempts to
blend behavioral analysis and economic analysis of law into a `behavioral
economic analysis of law'. This new movement within legal scholarship is
called `behavioral law and economics' (Sunstein 1997; Jolls et al. 1998) or
`law and behavioral science' (Korobkin and Ulen 2000) and builds on the
core insights of law-and-economics scholarship, but seriously scrutinizes
the shortcomings of rational choice theory. It asserts that legal scholars
seeking to understand the incentive effects of law in order to propose
efficacious legal policy should not be limited to rational choice theory,
since people regularly make decisions that deviate from rational choice in
predictable ways (Korobkin and Ulen 2000). Instead of a strict adherence
to rational choice theory, this new movement adopts a more subtle and
context-dependent view of how individuals behave for use in legal analy-
sis (Korobkin 2004). The ultimate goal of behavioral economic analysis
of law is to offer better predictions ...