Economic theory has invaded legal scholarship and law schools, in the form of "Law and economics." But the psychology of judgments and decisions has invaded economic theory, showing that people do not follow the classic model of economic rationality. Many legal scholars, such as Cass Sunstein, claim to have started a new field called "Behavioral law and economics," which explores the implications of psychology for legal theory. This seminar will review basic readings in law and economics and then the recent literature on the relevance of psychology.

Reading

I've ordered Steven Shavell's book Foundations of the economic analysis of law at the Penn Book Center (not the Penn Bookstore). Anyone who chokes on the price can ask me about alternatives. We will not be reading the whole thing but a good chunk of it, and it might be nice to have.

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  9/10-12: Read Chapter 1 of Shavell.
  Economic Analysis of Property Law, chs. 2, 5, 7 (sections 1-2).
  me (chs 2,5)
  Bret Wallace (ch 7 [1,2])
  

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  9/17: Shavell, Economic Analysis of Accident Law, chapters 8-9
  Heather Serden
  ch. 10, sections 8,9; ch. 11, sections 1-6.
  Caroline Spillane

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  9/19 and 9/24: Baron, J. & Ritov, I. (1993). Intuitions about penalties and compensation in the context of tort law. Journal of Risk and Uncertainty, 7, 17-33. (pdf)
  Joshua Taber
  Sunstein, C. R., Kahneman, D., & Schkade, D. (1998). Assessing punitive damages. Yale Law Journal, 107 (Iss. 7), pg. 2071 ff.
  Kristen Sheaffer
  Mitchell, Gregory and Tetlock, Philip E., "An Empirical Inquiry into the Relation of Corrective Justice to Distributive Justice" . Journal of Empirical Legal Studies, Vol. 3, 2006 Available at http://ssrn.com/abstract=912286
  Jonathan Weinblatt

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  9/26-10/1: Schkade, D., Sunstein, C. R., & Kahneman, D. (2004) Are juries less erratic than individuals? Deliberation, polarization, and punitive damages.
  Corissa Briglia

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  10/3-10/8: Shavell, Contract Law, ch. 13-16.
  David Caulk (chs. 13-14)
  Ami Patel (chs. 15-16)
  Wilkinson-Ryan and Baron
  Susan Lee

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  10/10: Economic Analysis of Public Law Enforcement and Criminal Law, chs. 20, 21 (sections 1-3), 23, 24.
  Heather Serden
  Jose Palau

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  10/17 (10/15 is break): Paul H. Robinson and John Darley (2002). Testing lay intuitions of justice: How and why? Hofstra Law Review, 2000, 28 (3), 611-634.
  Caroline Spillane
  Criminal Law as an Instrument of Behavioral Control: Should Deterrence Have a Role in the Formulation of Criminal Law Rules? (skip section 1, pp. 5-24).
  Bret Wallace
  Greene, J. D. , Cohen J. D. (2004) For the law, neuroscience changes nothing and everything. Philosophical Transactions of the Royal Society of London B, (Special Issue on Law and the Brain), 359, 1775-17785.
  Marty Mannion

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  10/19:
  Sunstein, C. R., Schkade, D., and Kahneman, D. (2000) Do people want optimal deterrence? Journal of Legal Studies, 29, 237-253.
  Susan Lee
  Baron and Ritov, "The role of probability of detection in judgments of punishment
  Il Lee

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  10/24:General Structure of Law, ch. 25
  Jose Palau
  Sunstein and Thaler, Libertarian paternalism:
  JB

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  10/29:
  Camerer et al., Asymmetric paternalism
  JB
  Glaeser Paternalism and psychology
  Ami Patel

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  10/31: Welfare Economics, Morality, and the Law, chs. 26-27
  Jonathan Weinblatt (ch. 26)
  Me (ch. 27)

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  11/5: Sunstein, Moral heuristics (Behavioral and Brain Sciences, 2005).
  Joshua Taber

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  11/7: Tax and income distribution: Shavell, chs. 28-29.
  Kristen Sheaffer
  McCaffery, E. J., & Baron J. (2005). The political psychology of redistribution. UCLA Law Review, 52, 1745-1792.
  Ashish Jatia

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  11/12: Tax:
  McCaffery & Baron, Isolation effects and the neglect of indirect effects of fiscal policies
  Ashish Jatia
  McCaffery, The uneasy case for capital taxation.
  Il Lee

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  11/14: More tax:
  Auerbach on the budget deficit
  Bret Wallace
  Baron and McCaffery on "starve the beast"
  Jose Palau

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  11/26: Charity, altruism, and psychic numbing
  Loewenstein and Small
  Corissa Briglia
  Slovic, "If I look at the mass, I will never act"

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  11/28: Davis article on matching and rebates
  Marty Mannion
• "Moralistic values" (Baron)
  Ami Patel

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  12/3: Cost-benefit analysis.
  Sunstein "Cognition and cost-benefit analysis"
  Susan Lee
• Climate change
  Posner and Sunstein, "Climate change justice"
  David Caulk

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  12/5: Climate change, continued
  an interesting video
  Baron, "Thinking about global warming"
  Jonathan Weinblatt
• Risk
  Kuran and Sunstein, "Controlling availability cascades." (short version)
  Ashish Jatia

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  12/7: Natural disasters
  Kunreuther and Pauly, "Rules rather than discretion: Lessons from Hurricane Katrina
  Il Lee

Course work

I will expect one written comment per week from each student on the reading, submitted before we discuss the reading. This should be posted to http://www.psych.upenn.edu/~baron/p253/.

I will ask one or two students to present the material for each class, with whatever comments they care to make. This page provides useful advice about presentations. In particular, if you use visual aids, do not simply make an outline and then read the outline.

Each student will write a course paper, two drafts. The last few meetings of the course will be devoted to student presentations about their papers.

Grading will be arbitrary and capricious. :)