Psychology/PPE 475:
Special topics in behavioral law and economics

Professor Jonathan Baron (
Spring 2011, Room C41 Solomon Psychology Lab Building, MW 2-3:30
See my web page for information about appointments and office location.
Mailing list:
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.

Areas of interest include:

This course counts as a capstone seminar in Philosophy, Politics and Economics (PPE). It is also open to graduate students.

Prerequisites: Micro-economics, and either Psych 153 (judgments and decisions) or 165 (behavioral economics), or permission.


I've ordered Steven Shavell's book Foundations of the economic analysis of law at the Penn Book Center (not the Penn Bookstore).

Read Shavell, Chapter 1, as background.
Economic Analysis of Property Law, chs. 2, 5, 7 (sections 1-2).
Antonio Vasquez chs. 2, 5
Janice Jung (ch 7, sections 1,2)

1/24 and 1/26
Eminent domain and the psychology of property rights, Nadler and Diamond
Veronica Wang
No fair, copycat!, (the paper)
Mike Tzeng

Shavell, Economic Analysis of Accident Law, chapters 8-9
Ilana Gromis
ch. 10, sections 8,9; ch. 11, sections 1-6.
Colin Hu
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)
Derric Bath
Sunstein, C. R., Kahneman, D., & Schkade, D. (1998). Assessing punitive damages. Yale Law Journal, 107 (Iss. 7), pg. 2071 ff.
Schkade, D., Sunstein, C. R., & Kahneman, D. (2004) Are juries less erratic than individuals? Deliberation, polarization, and punitive damages.
Emily Freeman
Shavell, Contract Law, ch. 13-16.
Seonghoon Jeong (chs. 13-14)
Antonio Vasquez (chs. 15-16)
Wilkinson-Ryan and Baron, Moral judgment and moral heuristics in breach of contract
Veronica Wang
Repugnant transactions.
Roth, Repugnance as a constraint on markets
Mike Tzeng
Krawiec on baby markets,
Mary Riverso
Krawiec, #2 (shorter but similar, suitable for class reading and comments)
Economic Analysis of Public Law Enforcement and Criminal Law, chs. 20, 21 (sections 1-3), 23, 24.
Nell Sorensen (chs. 20, 21)
Colin Hu (chs. 23, 24)
2/16, 2/21 and 2/23
Paul H. Robinson and John Darley (2004). Does criminal law deter?"
Benjamin Baumann
Robinson et al. The disutility of injustice
Veronica Wang
Raymond Fisman and Edward Miguel. (2007). Corruption, norms, and legal enforcement: Evidence from diplomatic parking tickets. Journal of Political Economy, 115, 1020-1048.
Emily Freeman
Baron, J., & Ritov, I. (2009). The role of probability of detection in judgments of punishment. Journal of Legal Analysis, 2, 553-590.
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.
Antonio Echavarria

Sunstein, C. R. (2005) Is capital punishment morally required?
Veronica Wang
Donahue, J. J. III, & Wolfers, J. (2006). Uses and abuses of empirical evidence in the death penalty debate
Mary Riverso
General Structure of Law, ch. 25
Mary Riverso
Sunstein and Thaler, Libertarian paternalism:
Antonio Echavarria
Korobkin Libertarian welfarism:
Thaler, Sunstein, Balz, Choice architecture
Janice Jung
Camerer et al., Asymmetric paternalism
Glaeser Paternalism and psychology
Ilana Gromis
Diamond, Vengeance is ours
A critique of it
Emily Freeman
Morality and law:
Welfare Economics, Morality, and the Law, ch. 27
Nell Sorensen
Welfare Economics, Morality, and the Law, ch. 27
Nell Sorensen (and JB)
Sunstein, Moral heuristics (Behavioral and Brain Sciences, 2005, copyright Cambridge University Press).
Benjamin Baumann
Bilz and Nadler Law, psychology, and morality
Veronica Wang
Baron, Where do non-utilitarian moral rules come from?
Benjamin Baumann
"Moralistic values" (Baron)
Janice Jung
Tax and income distribution:
Shavell, chs. 28-29.
Janice Jung (ch. 28)
(ch. 29)
McCaffery, E. J., & Baron J. (2005). The political psychology of redistribution. UCLA Law Review, 52, 1745-1792.
Derric Bath
More tax
McCaffery & Baron, Isolation effects and the neglect of indirect effects of fiscal policies
Ilana Gromis
Baron and McCaffery on "starve the beast"
Antonia Echavarria
McCaffery on consumption tax: Three views (short), or Progressivity (longer but very good and not as long as it looks)
Cost-benefit analysis.
Sunstein "Cognition and cost-benefit analysis"
Antonia Echavarria
Climate change
Posner and Sunstein, "Climate change justice"
an interesting video
Mike Tzeng
Baron, "Thinking about global warming"
Derric Bath
Kuran and Sunstein, "Controlling availability cascades." (short version)
Kunreuther and Pauly, "Rules rather than discretion: Lessons from Hurricane Katrina
Antonio Vasquez
4/20 and 4/25
Discussion of papers

Course work

I will expect one written comment per week from each student on the reading, submitted before we discuss the reading, unless you are presenting that week. This should be posted to the mailing list by sending mail to

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. :)