The Role of Bias in Economic Models of Law

Miceli Thomas J. () and Segerson Kathleen ()
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Miceli Thomas J.: Department of Economics, University of Connecticut, Storrs 06269, CT, USA
Segerson Kathleen: Department of Economics, University of Connecticut, Storrs 06269, CT, USA

Review of Law & Economics, 2021, vol. 17, issue 2, 419-452

Abstract: Behavioral economics has highlighted the impact of various biases on economic outcomes. This essay reviews how biases have been incorporated into economic models of the law and the resulting implications for the assessment of different legal rules and policies. It focuses on two contexts. The first concerns biases that affect consumer purchases of risky products. Using a standard accident model that incorporates various forms of consumer bias, we discuss how bias can affect the efficient assignment of liability for product-related accidents. The second context concerns biases that affect the administration of law, particularly regarding the adjudication of guilt, the lawmaking function of trials, and criminal sentencing. We examine procedural rules like precedent and sentencing guidelines, both of which are aimed at curtailing judicial bias.

Keywords: behavioral economics; bias; risk perceptions; legal error; judicial bias (search for similar items in EconPapers)
JEL-codes: D9 D91 K13 K15 K41 K42 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1515/rle-2021-0043

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