Christine M. Jolls on Non-Omniscience - Dictionary of Arguments
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Non-omniscience/non-optimization/bounded rationality/Jolls: David Friedman’s (2013)(1) analysis of the background for the New York City “soda law” develops both types of accounts [nonomniscience and nonoptimization]. >Bounded rationality/Simon.
Nonomniscience: With respect to nonomniscience, Friedman describes how optimism bias leads individuals to underestimate “obesity … and other consequences” of supersized sugary drink consumption (Friedman, 2013(1), p. 94).
Nonoptimization: With respect to nonoptimization, Friedman quotes former New York City Mayor Michael Bloomberg’s suggestion that the “soda law” was “really just a suggestion” that would tend to rechannel decision-making by satisficing or otherwise nonoptimizing decision-makers (...).
Jolls: Note that in the case of such relatively unthinking or satisficing consumers, nonoptimization may itself contribute to nonomniscience, as individuals who consume in a reflexive manner may be unlikely to obtain and accurately process information relevant to consumption patterns. >Bounded rationality.
Bounded rationality/Jolls: Although nonomniscience and nonoptimization are joined in Friedman’s analysis, there is once again no necessary implication that the two aspects of bounded rationality occasion similar normative analyses. Friedman’s own focus is on how the New York “soda law” transcended the specific, discrete parameters of the law’s nominal terms and became a subject of sweeping national debate over freedom and responsibility. >Bounded rationality/Jolls.
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Debiasing strategies: see Farnsworth, 2003(2); Jolls and Sunstein, 2006(3); Heller, 2009(4); Williams, 2009(5); Jolls, 2013a(6); Jolls, 2013b(7)).
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Optimism bias/legal limits for consumers: (...) optimism bias may lead many consumers to underestimate their personal risk (...).Accordingly, optimism bias (perhaps in conjunction with other factors) may justify legal limits on consumer transactions; the law may seek to minimize the negative effects of consumer nonomniscience while presuming that such nonomniscience itself will persist (for example, Prentice and Roszkowski, 1991–92)(8). However, such an effort may impose large costs of its own, as Schwartz (1988)(9) and others have suggested.
An alternative to such an approach is to use the law to reduce the degree of consumer nonomniscience in the first instance. (...) not all forms of bounded rationality respond to debiasing strategies (for example, Weinstein and Klein, 2002)(10); but in contexts in which social science evidence suggests such strategies can succeed (for example, Babcock, Loewenstein, and Issacharoff, 1997)(11), law can employ these strategies to reduce consumer nonomniscience. >Availability heuristic/Economic theories, >Risk perception/Economic theories, >Optimism bias/Economic theories.
1. Friedman, David Adam (2013). “Micropaternalism.” Tulane Law Review 88: 75–126.
2. Farnsworth, Ward (2003). “The Legal Regulation of Self-Serving Bias.” U.C. Davis Law Review 37: 567–603.
3. Jolls, Christine and Cass R. Sunstein (2006). “Debiasing through Law.” Journal of Legal Studies 35: 199–241.
4. Heller, Kevin Jon (2009). “The Cognitive Psychology of Mens Rea.” Journal of Criminal Law and Criminology 99: 317–379.
5. Williams, Sean Hannon (2009). “Sticky Expectations: Responses to Persistent Over-Optimism in Marriage, Employment Contracts, and Credit Card Use.” Notre Dame Law Review 84: 733–791.
6. Jolls, Christine (2013a). “Product Warnings, Debiasing, and Free Speech: The Case of Tobacco Regulation.” Journal of Institutional and Theoretical Economics 169: 53–78.
7. Jolls, Christine (2013b). “Bias and the Law of the Workplace,” in Cynthia L. Estlund and Michael L. Wachter, eds., Research Handbook on the Economics of Labor and Employment Law, 275–295. Cheltenham: Edward Elgar Publishing.
8. Prentice, Robert A. and Mark E. Roszkowski (1991–92). “‘Tort Reform’ and the Liability ‘Revolution’: Defending Strict Liability in Tort for Defective Products.” Gonzaga Law Review 27: 251–302.
9. Schwartz, Alan (1988). “Proposals for Products Liability Reform: A Theoretical Synthesis.” Yale Law Journal 97: 353–419.
10. Weinstein, Neil D. and William M. Klein (2002). “Resistance of Personal Risk Perceptions to Debiasing Interventions,” in Thomas Gilovich, Dale Griffin, and Daniel Kahneman, eds., Heuristics and Biases: The Psychology of Intuitive Judgment, 313–323. New York: Cambridge University Press.
11. Babcock, Linda, George Loewenstein, and Samuel Issacharoff (1997). “Creating Convergence: Debiasing Biased Litigants.” Law and Social Inquiry 22: 913–925.
Jolls, Christine, „Bounded Rationality, Behavioral Economics, and the Law“. In: Parisi, Francesco (ed) (2017). The Oxford Handbook of Law and Economics. Vol 1: Methodology and Concepts. NY: Oxford University Press._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Author1]Vs[Author2] or [Author]Vs[term] is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition.
|Jolls, Christine M.
Francesco Parisi (Ed)
The Oxford Handbook of Law and Economics: Volume 1: Methodology and Concepts New York 2017