Sunday, May 25, 2014

The Neglected role of Behavioral Ethics in Behavioral Law and Economics

There seem to be three main potential pillars for the criticism on rationality and consequently to Behavioral Law and Economics Literature; The biases and heuristics literature which focuses on limited cognition, the limitations of self-interest motivation which focuses on fairness and morality, and finally behavioral ethics which focuses on the motivational forces that limit people’s ability to recognize the wrong-doing of their own behavior. Yet, while the first two are considered as classical areas criticizing rationality with thousands of papers and dozens of books, the third- behavioral ethics- still lacks a stand, in my view, for no good reason.

Behavioral ethics focuses on people’s inability to recognize their wrongdoing. This process is explained as either the higher involvement of automatic reasoning through an unaware self-deception, or as post hoc rationalization justifying oneself unethical behavior. The emerging focus on “good people” in the psychology and management literature represents the growing recognition that many unethical decisions are not done by deliberate intention to act wrong, and are rather consequential to the situation.

Behavioral ethics is a huge and growing aspect of the management literature. It study topics such as implicit discrimination and is far less researched than the two mentioned above, especially from a legal perspective, leaving highly important questions completely unanswered, while its potential impact on legal theory is much more important. If, for example, the biases and heuristics literature challenges people’s ability to commit to long term decisions, research of behavioral ethics literature challenges people recognition that something is wrong with their behavior –the core question of the law. This is highly important because it challenges the ability of the law to change people's behavior. Supposedly, few people will change their behavior if they fail to see the wrongdoing of their own behavior.

The main intellectual history rationale behind this omission might be the fact that behavioral ethics emerged from management rather than economics. If this is the case, it is yet another reason to focus the behavioral analysis of law, to law rather than to economics.(See previous blog)

References:

Banaji, M. R., & A. G. Greenwald. (2013). Blindspot: Hidden Biases of Good People.

Bersoff, D. M. (1999). Why Good People Sometimes Do Bad Things: Motivated Reasoning and Unethical Behavior. Personality and Social Psychology Bulletin, 25(1), 28–39.

Mazar, N., O. Amir, & D. Ariely. (2008). The Dishonesty of Honest People: A Theory of Self-Concept Maintenance. Journal of marketing research, 45(6), 633-644.

Feldman, Yuval, Behavioral Ethics Meets Behavioral Law and Economics Handbook of Behavioral Law and Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2226711

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