Skip to main content
Article
Predictions and Nudges: What Behavioral Economics Has to Offer the Humanities, and Vice-Versa
Yale Journal of Law & the Humanities
  • Anne C Dailey
  • Peter Siegelman
Disciplines
Abstract

Richard H. Thaler and Cass R. Sunstein, Nudge: Improving Decisions About Health, Wealth, and Happiness. New Haven: Yale University Press, 2008. Pp. 304. $26.00.

Dan Ariely, Predictably Irrational: The Hidden Forces That Shape Our Decisions. New York: HarperCollins, 2008. Pp. 280. $25.95.

The informed law and humanities reader can hardly fail to be aware that the field of economics has undergone a "behavioral revolution" over the past several decades, and that this revolution has spilled over into the legal academy. Open an economics journal these days and you are likely to find any number of articles billing themselves as "behavioral" in orientation. Similarly, law reviews are filled with articles bearing titles ranging from "A Behavioral Approach to Law and Economics" to "Harnessing Altruistic Theory and Behavioral Law and Economics to Rein in Executive Salaries" and "Some Lessons for Law from Behavioral Economics About Stockbrokers and Sophisticated Customers."

What does this behavioral turn in economics and legal scholarship signify? In economics, "behavioral" means adapting insights and methods from cognitive psychology to choices that economists had previously analyzed with a rational actor model. Traditional economics assumes that individuals are able to process information quickly and without mistakes. Behavioralists modify the traditional model with findings from cognitive psychology showing that individuals fall prey to common and predictable errors in information processing such as framing, over-confidence, and hindsight bias, to name only a few of our cognitive failings.

Citation Information
Anne C Dailey and Peter Siegelman. "Predictions and Nudges: What Behavioral Economics Has to Offer the Humanities, and Vice-Versa"
Available at: http://works.bepress.com/peter_siegelman/5/