Prospect theory posits that people perceive outcomes as gains or losses in relation to some reference point. People are generally loss averse: the disutility generated by a loss is greater than the utility produced by a commensurate gain. Chapter 6 of the book argues that loss aversion can...

This is a Review of Guido Calabresi’s fascinating and thought-provoking new book, The Future of Law and Economics (presented in a book symposium held at the Hebrew University of Jerusalem in December 2016). The Review proposes to break the notion of commodification, as used by Calabresi, into...

Public choice theory (PCT) has had a powerful influence on political science and, to a lesser extent, on public administration. Based on the premise that public officials are rational maximizers of their own utility, PCT has a quite successful record of correctly predicting governmental...

Economic analysis, and economic analysis of law in particular, ordinarily assumes that paternalism and efficiency are incompatible bases for analyzing and evaluating rules and actions. Most economists reject paternalism as inefficient. By appealing to the theoretical foundations of normative...

Economic analysis of law is a powerful analytical methodology. However, as a purely consequentialist approach, which determines the desirability of acts and rules solely by assessing the goodness of their outcomes, standard cost-benefit analysis (CBA) is normatively objectionable. Thus, for...

Economic analysis of law is a powerful analytical methodology. At the same time, as a purely consequentialist approach, which determines the desirability of acts and rules solely by assessing the goodness of their outcomes, standard cost-benefit analysis (CBA) is normatively objectionable. This...

For nearly seventy years, the analysis of contract remedies has been dominated by Fuller and Perdue's classification of the interests protected by remedies: expectation, reliance, and restitution. Fuller and Perdue clarified the complex picture of contract remedies, yet has concomitantly...

Based on the premise that people are rational maximizers of their own utility, economic analysis has a fairly successful record in correctly predicting human behavior. This success is puzzling, given behavioral findings that show that people do not necessarily seek to maximize their own utility....

Incorporating behavioral insights into regulation is plausibly the most significant development in regulatory theory and practice in recent years. Behaviorally informed regulation encourages self-benefiting and socially desirable behaviors with little intrusion on autonomy. Drawing on new...

When social resources are limited, improving the lot of the underprivileged comes at the expense of others. Thus, policies such as Affirmative Action (AA) — designed to increase the representation of minority people in higher education or employment — implicitly entail tradeoffs between...