• About
    • Login
    View Item 
    •   Institutional Repository Home
    • Law School
    • Vanderbilt Law School Faculty Works
    • View Item
    •   Institutional Repository Home
    • Law School
    • Vanderbilt Law School Faculty Works
    • View Item
    JavaScript is disabled for your browser. Some features of this site may not work without it.

    Browse

    All of Institutional RepositoryCommunities & CollectionsBy Issue DateAuthorsTitlesSubjectsDepartmentThis CollectionBy Issue DateAuthorsTitlesSubjectsDepartment

    My Account

    LoginRegister

    Prospect Theory, Risk Preference, and the Law

    Guthrie, Chris
    : http://ssrn.com/abstract=344600
    : http://hdl.handle.net/1803/5906
    : 2003

    Abstract

    To understand how people behave in an uncertain world - and to make viable recommendations about how the law should try to shape that behavior - legal scholars must employ a model or theory of decision making. Only with an understanding of how people are likely to respond to legal rules can legal scholars, judges, legislators, and regulators craft rules that are likely to encourage desirable behavior and discourage undesirable behavior. Rather than rely on rational choice theory, behavioral law and economics scholars (or legal decision theorists) have turned to Daniel Kahneman and Amos Tversky's "prospect theory" to inform their analyses of law and legal behavior. Prospect theory contains several empirical propositions relevant to legal analysis, but this paper focuses primarily on prospect theory's insight that people often make risk-averse choices when selecting between "gains" and risk-seeking choices when selecting between "losses." The paper surveys efforts in the legal literature to use this insight to inform the way legal scholars think about law and behavior in several doctrinal areas. The paper acknowledges some limitations associated with this work (e.g., external validity, differences in individual decision making, differences in group vs. individual decision making), but it concludes that prospect theory is nonetheless a valuable tool for legal scholars and policy makers.
    Show full item record

    Files in this item

    Thumbnail
    Name:
    Prospect_Theory_Risk_Preference.pdf
    Size:
    3.220Mb
    Format:
    PDF
    Description:
    published article in law review
    View/Open

    This item appears in the following collection(s):

    • Vanderbilt Law School Faculty Works

    Connect with Vanderbilt Libraries

    Your Vanderbilt

    • Alumni
    • Current Students
    • Faculty & Staff
    • International Students
    • Media
    • Parents & Family
    • Prospective Students
    • Researchers
    • Sports Fans
    • Visitors & Neighbors

    Support the Jean and Alexander Heard Libraries

    Support the Library...Give Now

    Gifts to the Libraries support the learning and research needs of the entire Vanderbilt community. Learn more about giving to the Libraries.

    Become a Friend of the Libraries

    Quick Links

    • Hours
    • About
    • Employment
    • Staff Directory
    • Accessibility Services
    • Contact
    • Vanderbilt Home
    • Privacy Policy