An Overview of Behavioral Law and Economics

The chapter introduces behavioral law and economics. It is divided into three sections. The first section describes the history of behavioral law and economics since the late 1970s. The second section discusses the methodologies used in this sphere, including the emergence of empirical legal studies. Empirical legal studies include lab-experimental, observational, and field-experimental studies—the last category comprising randomized field experiments and natural experiments. Finally, the chapter analyzes the challenges facing this emerging, cross-disciplinary perspective. These challenges include critiques of the psychological studies that form the basis of behavioural law and economics, such as the issues of external validity of laboratory experiments. They also include difficulties in integrating behavioural insights into economic analysis of law.