Against the background of rational choice theory, this chapter provides an overview of the behavioral sub-disciplines informing behavioral law and economics—including judgment and decision-making studies, parts of social psychology, moral psychology, experimental game theory, and behavioral ethics. The chapter discusses deviations from cognitive and motivational rationality, including studies of people’s moral judgments. It begins with probability assessments and related issues. It critically describes phenomena related to prospect theory, phenomena associated with motivated reasoning and egocentrism, and those related to reference-dependence. It also summarizes studies of bounded willpower. Some attention is given to studies that show that most people do not share the consequentialist outlook that prioritizes the maximization of human welfare over all other values. Finally, the chapter discusses several issues that cut across various phenomena: individual differences in judgment and decision-making; the significance of professional training, experience, and expertise; deciding for others; group decision-making; cultural differences; and debiasing.
Keywords: heuristics and biases, dual-system theories, availability, hindsight bias, prospect theory, loss aversion, framing, omission bias, motivated reasoning, overoptimism, behavioral ethics, pro-social behavior, individual differences, group decision-making, debiasing
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