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Article
Beyond Individualism in Law and Economics
Boston University Law Review
  • Robert B. Ahdieh, Texas A&M University School of Law
Document Type
Article
Publication Date
1-2011
ISSN
0006-8047
Abstract

The study of law and economics was built upon two pillars. The first is the familiar assumption of individual rationality. The second, less familiar, is the principle of methodological individualism. Over the last twenty years, law and economics has largely internalized behavioral critiques of the rationality assumption. By contrast, the field has failed to appreciate the implications of growing challenges to its methodological individualism. Where social norms shape individual choices, network externalities are strong, coordination is the operative goal, or information is a substantial determinant of value, a methodology strongly oriented to the analysis of individuals overlooks at least as much as it reveals. Among other potential distortions, indicia of consent may be given greater weight than they deserve, the evolution of law and norms may be underemphasized, and our regulation of information, knowledge, and even the financial markets may be flawed. As with the shift toward a more careful approach to rationality, then, attention to the limits of methodological individualism may lead us to a richer account of law and economics.

Num Pages
43
Publisher
Boston University School of Law
Disciplines
File Type
PDF
Citation Information
Robert B. Ahdieh. "Beyond Individualism in Law and Economics" Boston University Law Review Vol. 91 Iss. 1 (2011) p. 43 - 85
Available at: http://works.bepress.com/robert_ahdieh/11/