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This essay advances two theses: that the law and economics movement has been losing its upward trajectory within law schools, and that its practitioners should increasingly look to psychology and sociology in order to enrich the explanatory power and normative punch of economic analysis.
The argument that law and economics lacks richness is hardly new. One of the wisest variations on the theme was Arthur Leff's sidesplitting 1974 review of Richard Posner's Economic Analysis of Law. Leff asserted the aridity of the rational-actor model of human behavior that economists employ. The economists' model, in its purest form, is based on elegantly simple propositions about both cognitive capacities and motivations. The model assumes that a person can perfectly process available information about alternative courses of action, and can rank possible outcomes in order of expected utility. The model also assumes that an actor will choose the course of action that will maximize his personal expected utility, which may, of course, reflect a concern for the welfare of others.
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