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Opportunity, not Welfare: How Behavioral Insights Should Lead to a Reorientation of the Normative Foundation in Law and Economics

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  2. Economics, Finance, Business & Management
  3. Journal of Contextual Economics – Schmollers Jahrbuch
  4. Vol. 142, Issue 1
  5. pp. 21–40

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van Emmerick, E., Dold, M. Opportunity, not Welfare: How Behavioral Insights Should Lead to a Reorientation of the Normative Foundation in Law and Economics. Journal of Contextual Economics – Schmollers Jahrbuch, 142(1), 21-40. https://doi.org/10.3790/schm.142.1.21
van Emmerick, Elias and Dold, Malte "Opportunity, not Welfare: How Behavioral Insights Should Lead to a Reorientation of the Normative Foundation in Law and Economics" Journal of Contextual Economics – Schmollers Jahrbuch 142.1, 2022, 21-40. https://doi.org/10.3790/schm.142.1.21
van Emmerick, Elias/Dold, Malte (2022): Opportunity, not Welfare: How Behavioral Insights Should Lead to a Reorientation of the Normative Foundation in Law and Economics, in: Journal of Contextual Economics – Schmollers Jahrbuch, vol. 142, iss. 1, 21-40, [online] https://doi.org/10.3790/schm.142.1.21
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Opportunity, not Welfare: How Behavioral Insights Should Lead to a Reorientation of the Normative Foundation in Law and Economics

van Emmerick, Elias | Dold, Malte

Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 142 (2022), Iss. 1 : pp. 21–40

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Article Details

Publisher Name
Duncker & Humblot
DOI
https://doi.org/10.3790/schm.142.1.21
Language
English
Pages
20
Keywords

Author Details

Elias van Emmerick, University of Chicago Law School 1111 E 60th St., Chicago, IL 60637 Chicago, IL, United States

Ass. Prof. Malte Dold, Economics Department, Pomona College 425 N. College Ave 91711 Claremont, CA, United States

Cited By

  1. Endogenous preferences: a challenge to constitutional political economy’s normative foundation?

    Dold, Malte

    (2023)

    https://doi.org/10.1007/s10602-023-09417-w [Citations: 1]

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Abstract

In Fairness versus Welfare (2003), Louis Kaplow and Steven Shavell provide a manifesto for normative law and economics. Therein, they spell out the foundations for contemporary law and economics based on a Paretian consequentialist welfarism and a preferentialist account of welfare. We argue in this paper that this normative program faces serious challenges from recent behavioral insights that push back against a core assumption of a preferentialist welfare analysis, i. e., that people hold context-independent, stable preferences across different legal arrangements. We suggest an alternative normative focus for law and economics that borrows from Robert Sugden’s (2018) opportunity criterion, which holds that individuals have an intrinsic interest in expanding their choice sets. We make the case that opportunity, rather than welfare as preference satisfaction, is a more convincing normative standard for law and economics, as its contractarian justification takes people’s broadly construed interests seriously. Moreover, it is methodologically better suited to deal with people’s unstable, context-dependent preferences.

Table of Contents

Section Title Page Action Price
Elias van Emmerick / Malte Dold: Opportunity, not Welfare: How Behavioral Insights Should Lead to a Reorientation of the Normative Foundation in Law and Economics 1
Abstract 1
1. Introduction 1
2. The Normative Foundations of Law and Economics 2
2.1 Context-Dependent Preferences: A Serious Challenge for Welfarist Legal Analysis 3
2.2 A Legal Example: Nonreciprocal Accidents 5
2.3 Welfarists’ Lacking Response 6
3. Alternative Normative Criteria in Economics 7
3.1 The Opportunity Criterion 7
3.2 Opportunity as a Contractarian Alternative 8
4. A Legal Opportunity Criterion 10
4.1 Operationalizing Opportunity 11
4.2 Opportunity as a Touchstone in Rulings: Three Examples 12
5. Conclusion 15
References 16

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