We are at the beginning of behavioral law and economics. We now see only dimly the outlines of the elaborate theory of decision making that is to come. We are like the independent scholars who examined the various parts of a very large animal and then tried to put together their reports to describe that animal; we each have bits and pieces of the elephant but no clear image of the entire beast. But we should not despair. We must remember that this behavioralist discipline is, as scholarly developments go, young. Indeed, the conventional law and economics model, to which behavioral law and economics is, in large part, a reaction, is itself relatively new. Law and economics has only recently established itself as a vigorous area of scholarship, as evidenced by regular courses within law schools, multiple textbooks, scholarly conferences, professional organizations, an AALS section, and so on. For instance, the American Law and Economics Association held its first annual meeting in May, 1991. Therefore, we should not be surprised if behavioral law and economics exhibits a degree of awkwardness, lack of focus, some fumbling, and other characteristics of youthfulness. In mitigation, I hasten to add that there are very strong reasons to believe that this particular youth will grow to a vigorous adulthood.
Nor should anyone be discouraged by the perfectly sensible criticisms that others make of behavioral theories. They are right to be critical and skeptical, and we should be, too. We must undertake the difficult task of persuading them of the value of the behavioral model.
I would make two more preliminary observations about behavioral law and economics. First, it seems to me to be a perfectly natural development within law and economics. The fact that this behavioral science interests legal academics testifies to the great importance and impact that law and economics has had on legal scholarship in the late twentieth century. In fact, I think that the behavioral law and economics literature takes its power from the great influence of the law and economics movement. Behavioral law and economics does not attempt to undo any of the remarkable accomplishments of law and economics. Rather, it is an attempt to refine.l
Second, I find it remarkable that this literature is being fleshed out principally in law schools, not in economics departments. One might think that this literature on how people really make decisions should be at the heart of modern microeconomic analysis, and yet most economists are either uninterested or disdainful.2 I suggest reasons below why those disciplines concerned with non-market choice, such as law, may be more interested in behavioral decision theory than are disciplines that focus on market choices. Legal academics should take great pride that they are so deeply involved in creating new knowledge about human decision making. To the extent that this effort will succeed, as I am confident that it will, the flow of knowledge will be in the opposite direction from what it has been in the last twenty years: from the law to economics.
My purpose in these remarks is not to be a curmudgeon about behavioral law and economics but to be a gentle prod. In doing so, I shall stand back from the particular articles of this Symposium to pick out broader trends in all of them. Part II sounds a few cautionary notes about some brush-clearing and weed-pulling that the new field needs to tend to. Part III suggests some aspects of behavioral law and economics that the papers in this Symposium might have missed or on which they put, in my opinion, insufficient emphasis. Part IV considers the future directions of behavioral law and economics.
II. IDENTIFYING THE PROBLEM CORRECTLY
In doing behavioral law and economics we must be very careful to distinguish environmental and structural problems3 from cognitive limitations. Both can make problems for legal decision makers, but in very different ways that may require different correctives. …