Taking behavioralism too seriously? The unwarranted pessimism of the new behavioral analysis of law.

• Author: Mitchell, Gregory

ABSTRACT

Legal scholars increasingly rely on a behavioral analysis of judgment and decision making to explain legal phenomena and argue for legal reforms. The main argument of this new behavioral analysis of the law is twofold: (1) All human cognition is beset by systematic flaws in the way that judgments and decisions are made, and these flaws lead to predictable irrational behaviors and (2) these widespread and systematic nonrational tendencies bring into serious question the assumption of procedural rationality underlying much legal doctrine. This Article examines the psychological research relied on by legal behavioralists to form this argument and demonstrates that this research does not support the bleak and simple portrait of pervasive irrationality painted by these scholars. Careful scrutiny of the psychological research reveals greater adherence to norms of rationality than that implied by the legal behavioralists, and the methodological and interpretive limitations on this psychological research make extrapolation from experimental settings to real world legal settings often inappropriate. Accordingly, this Article argues that legal scholars should exercise greater care and precision in their uses of psychological data to avoid advocating further legal reforms based on flawed understandings of psychological research.

Within the last few years, ... we have seen an outpouring of scholarship addressing the impact of behavioral research over a wide range of legal topics. Indeed, one might predict that the current behavioral movement eventually will have an influence on legal scholarship matched only by its predecessor, the law and economics movement. (1) INTRODUCTION

In a series of prominent, recent articles, Jon Hanson and Douglas Kysar argue that the legal system and legal academia should take more seriously behavioral research on judgment and decision making, for this research purportedly reveals that "human decisionmaking processes are prone to nonrational, yet systematic, tendencies." (2) Hanson and Kysar see this evidence of systematic, nonrational behavior as having great importance for the law: "Ultimately, any legal concept that relies in some sense on a notion of reasonableness or that is premised on the existence of a reasonable or rational decision maker will need to be reassessed in light of the mounting evidence that a human is a `reasoning rather than a reasonable animal.'" (3) Hanson and Kysar predict, moreover, that this "behavioralism" movement will eventually rival law and economics in degree of influence on legal scholarship. (4)

The prediction of Hanson and Kysar seems well on its way to coming true. (5) With rapidly increasing frequency, legal scholars employ a behavioral analysis of human judgment and decision making to critique existing laws and legal theory, especially the law and economics movement and its assumption of rational behavior. (6)

Unfortunately, the facile way in which these scholars summarize and then incorporate psychological research findings into legal theory ignores important limitations on this research. These scholars also evince a "pessimism bias" in their work: They tend to ignore or discount research findings contrary to their view of legal decision makers as afflicted by numerous judgmental biases and decision-making errors, while simultaneously interpreting ambiguous research findings as supportive of their pessimistic view of human rationality. Simply put, the empirical research does not support the dire pronouncements of legal scholars regarding the human capacity for irrational behavior. Just as troubling as the overreaching claims about human cognition that these scholars make is their uncritical acceptance by others. (7)

This Article presents the first detailed analysis of legal scholars' misinterpretations of behavioral decision theory--the body of empirical research on which this new field so heavily relies. (8) An examination of the empirical evidence on human judgment and decision making demonstrates that, contrary to the contentions of Hanson, Kysar, and the other legal behavioralists, this body of evidence does not prove that experimental subjects--much less real-world legal decision makers--systematically violate norms of rationality when forming judgments and making decisions. This Article discusses three sets of limitations on behavioral decision theory research that the legal behavioralists fail to appreciate, thereby leading them to incorrect and simplistic conclusions about human rationality: (1) features of this research that mask individual and situational differences in rational behavior and artificially heighten the apparent frequency of irrational behavior; (2) features unique to the experimental research setting that intentionally and unintentionally increase the likelihood of finding irrational behavior and distort perceptions of the frequency of irrational behavior outside of the laboratory; and (3) features of this research that diminish its real-world importance and its ability to provide prescriptive guidance in the law. The Article concludes by discussing possible explanations for why legal scholars have taken behavioral research on judgment and decision making too seriously and too unskeptically, leading to the unwarranted pessimism about human rationality found in so much recent legal scholarship.

When the full range of empirical research into judgment and decision making is considered, and when the methodological assumptions and choices of this research are laid bare, it becomes clear that this body of research does not present an unqualified account of pervasive and systematic irrationality. Rather, this research reveals that some people can be made to appear irrational under some circumstances while many people can be made to appear quite rational under other circumstances. A rational review of the evidence on human judgment and decision making should lead one to agnosticism rather than empirical certainty on the matter of the rationality or irrationality of legal decision making.

1. THE EMERGENCE OF LEGAL DECISION THEORY

   1. An Assault on the Rationality Assumption

      A growing number of scholars assert that legal theory and doctrine should be reformed in light of the research of psychologists and behavioral economists demonstrating that the psychological mechanisms involved in human information-processing often lead to biases and errors in judgment and decision making. (9) These scholars contend that proponents of an economic analysis of legal behavior should pay particular attention to this body of research, which is often referred to as "behavioral decision theory," (10) for it purportedly demonstrates that legal decision makers do not conduct themselves according to the norms of rational behavior assumed by economic theory. (11)

      In the view of these "legal decision theorists," (12) behavioral decision theory establishes conclusively that humans systematically violate principles of rationality when making judgments and decisions about all sorts of matters in all sorts of domains. (13) Our preferences change with normatively irrelevant changes in the decision setting (e.g., support for a public policy may depend on whether it is framed in terms of lives to be lost versus lives to be saved if the policy is implemented, even though the net result remains constant); we are too sensitive to anecdotal but unrepresentative data in our probability and causation judgments and not sensitive enough to diagnostic, base rate information or sample size; we are incapable of ignoring information about the occurrence and severity of events when judging after the fact whether a defendant acted negligently (i.e., we fall prey to a certainty-of-hindsight bias); we are overly optimistic about the likelihood of negative events and overly confident in the correctness of our factual beliefs--to name only a few of the cognitive errors and biases to which we are supposedly susceptible? Suffice it to say that legal decision theorists portray legally relevant judgment and decision making as seriously flawed. (15) From this empirical assumption legal decision theorists argue that the law should be fashioned to take account of the systematic irrationality of legal actors. (16) Conversely, they argue that proof of systematically irrational behavior makes it unwise to base laws on economic theories that necessarily assume rational behavior. (17)

      The breadth of legal decision theory's assault on the rationality assumption cannot be overstated: legal decision theorists collectively contend that all judgments and decisions of legal importance--whether made by ordinary citizens or criminals, litigants or lawyers, judges or jurors--involve imperfect psychological processes that consistently cause irrational judgments and choices to be made. (18) The statements of Hanson and Kysar illustrate the general view expressed by legal decision theorists regarding the pervasiveness of "cognitive illusions": "These cognitive illusions--sometimes referred to as biases--are not limited to the uneducated or unintelligent, and they are not readily capable of being unlearned. Instead, they affect us all with uncanny consistency and unflappable persistence." (19)

      A reader of legal decision theory scholarship is hard-pressed to find any clear, much less any theoretically driven, specification of boundary conditions on the contention that legal judgment and decision making are subject to numerous systematic defects. (20) Even when legal decision theorists concede the point that surely not all decision making is irrational, they counter with the assertion that specific instances of legal decision making, however, will be particularly prone to irrational tendencies--without clearly explaining why this should be the case. (21)

      This claim that cognitive biases and errors operate uniformly and pervasively in the population is crucial to the legal decision theory...