Takings

Abstract

This chapter discusses key aspects of takings law from a behavioral perspective and employs psychological insights to critically analyze existing legal rules and theories. The chapter highlights various factors that affect the perceived legitimacy of the taking and its adverse impact on property owners. In addition, the chapter addresses two central topics from a behavioral perspective: (1) When should compensation be paid? and (2) what constitutes just compensation? It shows that current compensation rules unjustifiably distinguish between different types of injuries to property, and that the risk of systematic undercompensation of property owners is more severe than commonly realized. These phenomena may have detrimental effects in terms of both efficiency and fairness.