Document Type

Article

Publication Year

2011

Journal Title

Boston University Law Review

Abstract

The study of law and economics was built upon two pillars. The first is the familiar assumption of individual rationality. The second, less familiar, is the principle of methodological individualism. Over the last twenty years, law and economics has largely internalized behavioral critiques of the rationality assumption. By contrast, the field has failed to appreciate the implications of growing challenges to its methodological individualism. Where social norms shape individual choices, network externalities are strong, coordination is the operative goal, or information is a substantial determinant of value, a methodology strongly oriented to the analysis of individuals overlooks at least as much as it reveals. Among other potential distortions, indicia of consent may be given greater weight than they deserve, the evolution of law and norms may be underemphasized, and our regulation of information, knowledge, and even the financial markets may be flawed. As with the shift toward a more careful approach to rationality, then, attention to the limits of methodological individualism may lead us to a richer account of law and economics.

First Page

43

Last Page

85

Num Pages

43

Issue Number

1

FIle Type

PDF

Share

COinS
 
 

To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.