NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Debiasing through Law

Christine Jolls, Cass R. Sunstein

NBER Working Paper No. 11738
Issued in November 2005
NBER Program(s):   LE

In many settings, human beings are boundedly rational. A distinctive and insufficiently explored legal response to bounded rationality is to attempt to "debias through law," by steering people in more rational directions. In many important domains, existing legal analyses emphasize the alternative approach of insulating outcomes from the effects of boundedly rational behavior, often through blocking private choices. In fact, however, a large number of actual and imaginable legal strategies are efforts to engage in the very different approach of debiasing through law by reducing or even eliminating people's boundedly rational behavior. In important contexts, these efforts to debias through law can avoid the costs and inefficiencies associated with regulatory approaches that take bounded rationality as a given and respond by attempting to insulate outcomes from its effects. This paper offers a general account of how debiasing through law does or could work to address legal questions across a range of areas, from consumer safety law to corporate law to property law. Discussion is also devoted to the risks of government manipulation and overshooting that are sometimes raised when debiasing through law is employed.

download in pdf format
   (275 K)

email paper

This paper is available as PDF (275 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w11738

Published: Jolls, Christine and Cass R. Sunstein. "Debiasing Through Law." Journal of Legal Studies 35 (2006): 199-241.

Users who downloaded this paper also downloaded these:
Jolls w12879 Behavioral Law and Economics
Mian and Sufi w15283 House Prices, Home Equity-Based Borrowing, and the U.S. Household Leverage Crisis
Ellison w9721 A Model of Add-on Pricing
Feenstra w15593 Measuring the Gains from Trade under Monopolistic Competition
Svensson w11167 Monetary Policy with Judgment: Forecast Targeting
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us