Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/292607 
Year of Publication: 
2022
Citation: 
[Journal:] Journal of Contextual Economics – Schmollers Jahrbuch [ISSN:] 2568-762X [Volume:] 142 [Issue:] 1 [Year:] 2022 [Pages:] 21-40
Publisher: 
Duncker & Humblot, Berlin
Abstract: 
In Fairness versus Welfare (2003), Louis Kaplow and Steven Shavell provide a manifesto for normative law and economics. Therein, they spell out the foundations for contemporary law and economics based on a Paretian consequentialist welfarism and a preferentialist account of welfare. We argue in this paper that this normative program faces serious challenges from recent behavioral insights that push back against a core assumption of a preferentialist welfare analysis, i. e., that people hold context-independent, stable preferences across different legal arrangements. We suggest an alternative normative focus for law and economics that borrows from Robert Sugden's (2018) opportunity criterion, which holds that individuals have an intrinsic interest in expanding their choice sets. We make the case that opportunity, rather than welfare as preference satisfaction, is a more convincing normative standard for law and economics, as its contractarian justification takes people's broadly construed interests seriously. Moreover, it is methodologically better suited to deal with people's unstable, context-dependent preferences.
Subjects: 
Behavioral Economics
Normative Law and Economics
Opportunity Criterion
Preferences
Robert Sugden
Welfare
JEL: 
K40
D63
D91
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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