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Economics
The Peculiar Blindness of Experts
July 2, 2019
The pattern is by now familiar. In the 30 years since Ehrlich sent Simon a check, the track record of expert forecasters—in science, in economics, in politics—is as dismal as ever. In business, esteemed (and lavishly compensated) forecasters routinely are wildly wrong in their predictions of everything from the next stock-market correction to the next housing boom. Reliable insight into the future is possible, however. It just requires a style of thinking that’s uncommon among experts who are certain...
July 2, 2019
The pattern is by now familiar. In the 30 years since Ehrlich sent Simon a check, the track record of expert forecasters—in science, in economics, in politics—is as dismal as ever. In business, esteemed (and lavishly compensated) forecasters routinely are wildly wrong in their predictions of everything from the next stock-market correction to the next housing boom. Reliable insight into the future is possible, however. It just requires a style of thinking that’s uncommon among experts who are certain...
Legal Theory Lexicon: The Prisoners’ Dilemma
June 28, 2019
One of the most useful tools in analyzing legal rules and the policy problems to which they apply is game theory. The basic...
June 28, 2019
One of the most useful tools in analyzing legal rules and the policy problems to which they apply is game theory. The basic...
Risk & Rigor: A Lawyer’s Guide to Decision Trees for Assessing Cases and Advising Clients
June 7, 2019
Risk and Rigor offers practical guidance to lawyers, mediators, and clients on using decision trees to more rigorously think...
June 7, 2019
Risk and Rigor offers practical guidance to lawyers, mediators, and clients on using decision trees to more rigorously think...
Why Did People Pay $600 For a Pair of $20 Payless Shoes?
January 6, 2019
The Palessi Luxury Brand Launch Party Here’s what happened. The company took over a former Armani store in Santa Monica California for a weekend in late November 2018. It created a luxury ambiance and stocked the store with the same Payless shoes that sell for $20–$40. It invented an upscale fashion designer called Bruno Palessi, branding the store as a “Palessi” store. (It even created an Instagram account and website for the fake brand). For the Palessi store’s grand opening...
January 6, 2019
The Palessi Luxury Brand Launch Party Here’s what happened. The company took over a former Armani store in Santa Monica California for a weekend in late November 2018. It created a luxury ambiance and stocked the store with the same Payless shoes that sell for $20–$40. It invented an upscale fashion designer called Bruno Palessi, branding the store as a “Palessi” store. (It even created an Instagram account and website for the fake brand). For the Palessi store’s grand opening...
People Aren’t Dumb. The World Is Hard.
January 6, 2019
You wouldn’t think you could win a Nobel Prize for showing that humans tend to make irrational decisions. But that’s what Richard Thaler has done. The founder of behavioral economics describes his unlikely route to success; his reputation for being lazy; and his efforts to fix the world — one nudge at a time. * * * Years ago, Richard Thaler became enthralled with a new line of research about decision-making by the psychologists...
January 6, 2019
You wouldn’t think you could win a Nobel Prize for showing that humans tend to make irrational decisions. But that’s what Richard Thaler has done. The founder of behavioral economics describes his unlikely route to success; his reputation for being lazy; and his efforts to fix the world — one nudge at a time. * * * Years ago, Richard Thaler became enthralled with a new line of research about decision-making by the psychologists...
Should Antitrust Survive Behavioral Economics?
January 4, 2019
The accepted economic foundation of antitrust law is straightforward: The neoclassical market model shows that perfect competition among firms maximizes productive and allocative efficiencies and social welfare. This model rests on several assumptions, including — as in neoclassical economics more generally — the notion that consumers are rational actors whose decisions always maximize their utility. This model rests on several assumptions, including — as in neoclassical economics more generally...
January 4, 2019
The accepted economic foundation of antitrust law is straightforward: The neoclassical market model shows that perfect competition among firms maximizes productive and allocative efficiencies and social welfare. This model rests on several assumptions, including — as in neoclassical economics more generally — the notion that consumers are rational actors whose decisions always maximize their utility. This model rests on several assumptions, including — as in neoclassical economics more generally...
Woodford on Individual Welfare & Behavioral Economics
October 21, 2018
Michael Woodford (Columbia University, Graduate School of Arts and Sciences, Department of Economics; National Bureau of Economic Research (NBER)) has posted Individualistic Welfare Analysis in the Age of Behavioral Science (Capitalism and Society: Vol. 13: Iss. 1, Article 3) on SSRN. Here is the abstract: Experimental demonstration of systematic errors and biases in human choice behavior might seem to undermine the conceptual basis of the individualistic approach to welfare analysis, in which...
October 21, 2018
Michael Woodford (Columbia University, Graduate School of Arts and Sciences, Department of Economics; National Bureau of Economic Research (NBER)) has posted Individualistic Welfare Analysis in the Age of Behavioral Science (Capitalism and Society: Vol. 13: Iss. 1, Article 3) on SSRN. Here is the abstract: Experimental demonstration of systematic errors and biases in human choice behavior might seem to undermine the conceptual basis of the individualistic approach to welfare analysis, in which...
Aggressive Economic Incentives and Physical Activity: The Role of Choice and Technology Decision Aids
October 21, 2018
Aggressive incentive schemes that allow individuals to impose economic punishment on themselves if they fail to meet health goals present a promising approach for encouraging healthier behavior. However, the element of choice inherent in these schemes introduces concerns that only non-representative sectors of the population will select aggressive incentives, leaving value on the table for those who don’t opt-in. In a field experiment conducted over a 29-week period on individuals wearing Fitbit...
October 21, 2018
Aggressive incentive schemes that allow individuals to impose economic punishment on themselves if they fail to meet health goals present a promising approach for encouraging healthier behavior. However, the element of choice inherent in these schemes introduces concerns that only non-representative sectors of the population will select aggressive incentives, leaving value on the table for those who don’t opt-in. In a field experiment conducted over a 29-week period on individuals wearing Fitbit...
Zamir and Teichman on Behavioral Law & Economics
July 19, 2018
Eyal Zamir and Doron Teichman (Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem - Faculty of Law) have posted Behavioral Law and Economics - Introduction (Behavioral Law and Economics, Oxford University Press, 2018) on SSRN. Here is the abstract: In the past few decades, economic analysis of law has been challenged by a growing body of experimental and empirical studies that attest to prevalent and systematic deviations from the assumptions of economic rationality....
July 19, 2018
Eyal Zamir and Doron Teichman (Hebrew University of Jerusalem - Faculty of Law and Hebrew University of Jerusalem - Faculty of Law) have posted Behavioral Law and Economics - Introduction (Behavioral Law and Economics, Oxford University Press, 2018) on SSRN. Here is the abstract: In the past few decades, economic analysis of law has been challenged by a growing body of experimental and empirical studies that attest to prevalent and systematic deviations from the assumptions of economic rationality....
Law and Psychology Grows Up, Goes Online, and Replicates
June 3, 2018
Over the last 30 years, legal scholars have increasingly deployed experimental studies, particularly hypothetical scenarios, to test intuitions about legal reasoning and behavior. That movement has accelerated in the last decade, facilitated in large part by cheap and convenient Internet participant recruiting platforms like Amazon Mechanical Turk. The widespread use of online subjects, a practice that dramatically lowers the barriers to entry for experimental research, has been controversial. At the same...
June 3, 2018
Over the last 30 years, legal scholars have increasingly deployed experimental studies, particularly hypothetical scenarios, to test intuitions about legal reasoning and behavior. That movement has accelerated in the last decade, facilitated in large part by cheap and convenient Internet participant recruiting platforms like Amazon Mechanical Turk. The widespread use of online subjects, a practice that dramatically lowers the barriers to entry for experimental research, has been controversial. At the same...
