Scholarship Update

Two important works on behavioral ethics have been posted recently. The first is by Professor Eyal Zamir, a leading scholar on the application of behavioral science to legal decision-making, who makes the important point that behavioral research supports “many of the predictions of standard economic analysis, without committing to a simplistic portrayal of human motivation.”  The second is co-authored by Professor Yuval Feldman, a leader in the field of behavioral ethics (see our prior post about his book), who discusses the implications of behavioral ethics in the field of compliance.  Abstracts for both papers are provided below.

Zamir, Eyal, Refounding Law and Economics: Behavioral Support for the Predictions of Standard Economic Analysis (August 26, 2019). Review of Law and Economics, Forthcoming; Hebrew University of Jerusalem Legal Research Paper. Available at SSRN: https://ssrn.com/abstract=3442740

Abstract

Based on the premise that people are rational maximizers of their own utility, economic analysis has a fairly successful record in correctly predicting human behavior. This success is puzzling, given behavioral findings that show that people do not necessarily seek to maximize their own utility. Drawing on studies of motivated reasoning, self-serving biases, and behavioral ethics, this article offers a new behavioral foundation for the predictions of economic analysis. The behavioral studies reveal how automatic and mostly unconscious processes lead well-intentioned people to make self-serving decisions. Thus, the behavioral studies support many of the predictions of standard economic analysis, without committing to a simplistic portrayal of human motivation. The article reviews the psychological findings, explains how they provide a sounder, complementary foundation for economic analysis, and discusses their implications for legal policymaking.

Feldman, Yuval and Kaplan, Yotam, Behavioral Ethics as Compliance (September 23, 2019). Forthcoming, Cambridge Handbook of Compliance (Van Rooij & Sokol Eds.) Available at SSRN: https://ssrn.com/abstract=3458582

Abstract:

This chapter studies the implications of behavioral ethics research to questions of legal compliance. Behavioral ethics emphasizes the concept of bounded ethicality, referring to a long list of biases and cognitive limitations that prevent people from making a full and candid evaluation of the ethicality of their own actions. In other words, people often act unethically not because they made a conscious choice to behave badly, but because they were able to ignore, downplay, or justify their own misconduct. This chapter explores the meaning of behavioral ethics findings for questions of compliance with the law. That is, if people often ignore or downplay their own unethical choices, how can law-makers and regulators act to improve compliance with the law? The chapter describes the central relevant findings of behavioral ethics research, the challenges these findings pose for legal compliance, and outlines possible solutions. In particular, we advocate a novel regulatory approach utilizing ethical nudges: regulatory interventions that are designed to improve ethical deliberations by potential wrongdoers.

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