Lynn Stout: UCLA School of Law

Legal scholars have become keenly interested in behavioral approaches to lawthat recognize that real people do not always behave in a selfishly rational fashion: numerous recent papers examine how human choice can be distorted by endowment effects, anchoring effects, availability biases, and other cognitive deficiencies. There is a curious imbalance to this “behavioral law and economics” literature, however. Contemporary critiques of the selfish rationality model of human behavior tend to focus far more on the
second modifier – the assumption of rationality – than on first – the assumption of self interest.

This article reverses that emphasis. It argues that the human tendency to act in an other-regarding fashion (to sacrifice in order to help or harm others) is far more pervasive and important than generally recognized. In support of this claim, it reviews the extensive empirical evidence that has been accumulated over the past five decades on human behavior in experiments known as social dilemma games, ultimatum games, and dictator games. These experiments have consistently found that under certain circumstances, subjects routinely behave as if they care about costs and benefits to others. In the parlance of economics, they predictably “reveal”
other-regarding preferences. Moreover, this other-regarding behavior seems driven primarily by social context – subjects’ perceptions of what others believe, what others expect, and how others are likely to behave.

These findings are of importance not only to our understanding of individual behavior, but also to our understanding of a wide variety of social institutions, including the social institution known as law. To illustrate, this Article offers a simple model of other-regarding behavior derived from the experimental evidence. It then explores how the model sheds light on three basic areas of legal doctrine: tort, contract, and criminal law. As will be seen, incorporating other-regarding behavior into the analysis offers to explain a number of puzzles in these three areas that cannot be resolved by using the homo economicus model of selfish rationality. It also promotes a better appreciation of the essential role “conscience” may play in ensuring a functioning legal system, as well as the myriad, subtle, and sometimes counterintuitive ways in which state and private actors employ law to change behavior.