Year: 2026
Type: article
Abstract: Behavioral economics’ most severe criticism is that it lacks a coherent theory for predicting when irrationality will govern decision-making. BE is often therefore identified as a body of anomalies residual or exceptional to rational choice theory. This Article answers the question of why this is the case and does so by distinguishing between two types of predictive power—endogenous and exogenous. In lacking any normative foundation, behavioral economics is limited to the latter, which illuminates not only its theoretical limits but also why such exogeneity may be incompatible with a legal system based on general and uniform governance structures. The Article thus clarifies this long-running question of not only why behavioral economics is the residual of rational choice but also why it should be.
Source: German Law Journal
Author: Peter O’Loughlin
Institution: Ollscoil na Gaillimhe – University of Galway
Language: English
Subfield: General Decision Sciences
Field: Decision Sciences
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $2,660
OpenAlex ID: W7162791867
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