A Behavioral Approach to Law and Economics

A behavioral approach to law and economics examines how actual human behavior, which can be irrational or influenced by emotions and biases, impacts legal rules and economic decisions. Unlike traditional models assuming people always act rationally to maximize their benefits, this approach recognizes that people often make decisions that deviate from strict logic. By understanding these patterns, policymakers can create laws that better align with real-world behavior, improving effectiveness, compliance, and fairness in legal and economic systems.