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Experimental Law and Economics

Edited by Jennifer H. Arlen, Norma Z. Paige Professor of Law and Director, Center for Law, Economics and Organizations, New York University School of Law, US and Eric L. Talley, Professor of Law and Co-Director, Center for Law, Business and the Economy, Berkeley School of Law, University of California, US
During the last two decades researchers in the field of experimental law and economics have made significant contributions to our knowledge of human behaviour and its interaction with legal and regulatory environments. This collection of previously published papers examines the use of laboratory experiments to test and develop these theories about how people behave, including their responses to legal rules.
Extent: 784 pp
Hardback Price: £226.00 Web: £203.40
Publication Date: 2008
ISBN: 978 1 84542 712 2
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  • Economics and Finance
  • Behavioural and Experimental Economics
  • Law and Economics
  • Methodology of Economics
  • Law - Academic
  • Law and Economics
During the last two decades researchers in the field of experimental law and economics have made significant contributions to our knowledge of human behaviour and its interaction with legal and regulatory environments. This collection of previously published papers examines the use of laboratory experiments to test and develop these theories about how people behave, including their responses to legal rules.

An important resource for judges, policymakers and scholars alike, the articles presented are drawn from diverse disciplines such as economics, law and psychology. The editors’ comprehensive introduction provides expert analysis and insightful discussion of new directions in the field. Also included is an extended bibliography of additional articles to further aid readers’ study.
‘Experimental analysis under controlled conditions provides a unique perspective on how people respond to legal rules and institutions. The Arlen–Talley volume is a superb collection of the seminal articles, assembled in a coherent way to help the reader understand and assess the potential of this body of research.’
– Wallace E. Oates, University of Maryland, US

‘The authors are distinguished contributors to the area of law and economics, a field that has grown tremendously in the previous few decades. This is a fine and most welcome collection that focuses on the nexus of important positive and normative issues within this field. Both theorists and empiricists in this field as well as practitioners will find this a must read.’
– John A. List, University of Chicago, US
26 articles, dating from 1982 to 2007
Contributors include: L. Babcock, R. Croson, E. Hoffman, D. Kahneman, G. Loewenstein, E. McCaffery, C. Plott, S. Schwab, W.K. Viscusi, R. Zeckhauser
Contents:

Acknowledgements

Introduction Jennifer H. Arlen and Eric L. Talley

PART I EXPERIMENTAL TEST OF THE COASE THEOREM
1. Elizabeth Hoffman and Matthew Spitzer (1982), ‘The Coase Theorem: Some Experimental Tests’
2. Stewart Schwab (1988), ‘A Coasean Experiment on Contract Presumptions’
3. Rachel Croson and Jason Scott Johnston (2000), ‘Experimental Results on Bargaining Under Alternative Property Rights Regimes’

PART II LOSS AVERSION: ENDOWMENT EFFECTS, FRAMING EFFECTS, STATUS QUO BIAS
A Endowment Effects
4. Daniel Kahneman, Jack L. Knetsch and Richard H. Thaler (1990), ‘Experimental Tests of the Endowment Effect and the Coase Theorem’
5. Jennifer Arlen, Matthew Spitzer and Eric Talley (2002), ‘Endowment Effects within Corporate Agency Relationships’
6. Charles R. Plott and Kathryn Zeiler (2005), ‘The Willingness to Pay-Willingness to Accept Gap, the “Endowment Effect”, Subject Misconceptions, and Experimental Procedures for Eliciting Valuations’

B Framing Effects
7. Edward J. McCaffery, Daniel J. Kahneman and Matthew L. Spitzer (1995), ‘Framing the Jury: Cognitive Perspectives on Pain and Suffering Awards’
8. Russell Korobkin and Chris Guthrie (1997), ‘Psychology, Economics, and Settlement: A New Look at the Role of the Lawyer’

PART III SETTLEMENT BEHAVIOUR, SELF-SERVING BIAS AND THE ROLE OF LAWYERS
9. Linda Babcock, George Loewenstein, Samuel Issacharoff and Colin Camerer (1995), ‘Biased Judgments of Fairness in Bargaining’
10. George Loewenstein and Don A. Moore (2004), ‘When Ignorance is Bliss: Information Exchange and Inefficiency in Bargaining’
11. Linda Babcock, George Loewenstein and Samuel Issacharoff (1998), ‘Creating Convergence: Debiasing Biased Litigants’
12. Greg Pogarsky and Linda Babcock (2001), ‘Damage Caps, Motivated Anchoring, and Bargaining Impasse’

PART IV FAIRNESS, TRUST AND CROWDING OUT
13. Elizabeth Hoffman, Kevin McCabe, Keith Shachat and Vernon Smith (1994), ‘Preferences, Property Rights, and Anonymity in Bargaining Games’
14. Elizabeth Hoffman, Kevin McCabe and Vernon L. Smith (1996), ‘Social Distance and Other-Regarding Behavior in Dictator Games’
15. Robert H. Frank, Thomas Gilovich and Dennis T. Regan (1993), ‘Does Studying Economics Inhibit Cooperation?’
16. Ernest Fehr, Alexander Klein and Klaus M. Schmidt (2007), ‘Fairness and Contract Design’
17. Iris Bohnet, Bruno S. Frey and Steffen Huck (2001), ‘More Order with Less Law: On Contract Enforcement, Trust, and Crowding’
18. Daylian M. Cain, George Loewenstein and Don A. Moore (2005), ‘The Dirt on Coming Clean: Perverse Effects of Disclosing Conflicts of Interest’

PART V REASONING ABOUT RISK AND LOSS
A Legal Rules and Deterrence
19. Lewis Kornhauser and Andrew Schotter (1990), ‘An Experimental Study of Single-Actor Accidents’
20. Uri Gneezy and Aldo Rustichini (2000), ‘A Fine Is a Price’

B Assessment of Risk by Judges and Juries
21. Kim A. Kamin and Jeffrey J. Rachlinski (1995),’ Ex Post ? Ex Ante: Determining Liability in Hindsight’
22. Alison C. Smith and Edith Greene (2005), ‘Conduct and its Consequences: Attempts at Debiasing Jury Judgments’
23. W. Kip Viscusi and Richard J. Zeckhauser (2004), ‘The Denominator Blindness Effect: Accident Frequencies and the Misjudgment of Recklessness’

C Impact of Decision Rules on Juries
24. Chris Guthrie, Jeffrey J. Rachlinski and Andrew J. Wistrich (2001), ‘Inside the Judicial Mind’
25. David Schkade, Cass R. Sunstein and Daniel Kahneman (2000), ‘Deliberating About Dollars: The Severity Shift’
26. Serena Guarnaschelli, Richard D. McKelvey and Thomas R. Palfrey (2000), ‘An Experimental Study of Jury Decision Rules’

Name Index