Abstract:

This dissertation is comprised of three essays from the field of behavioral law and economics. The first essay presents evidence from a series of experiments that explore the act/omission distinction that pervades the criminal and civil law. In particular, the experiments test for the existence of omission bias. I obtain results that are inconsistent with preferences defined solely over outcomes. Instead, many subjects exhibit omission bias, and do so in a self-serving way. Subjects behave as traditional utility maximizers when inaction would lead to low payoffs; however, while they are not willing to create advantageous inequality themselves, they are willing to allow randomly-generated advantageous inequality to persist by failing to act. I interpret the data using a model that reflects the independent, but conditional, concern that subjects have for the effects of their actions. The second essay provides two contributions to the literature on settlement delay in civil litigation. First, it provides a simple framework for incorporating both the discovery process and confirmatory bias into a formal analysis of litigation. Second, it evaluates the effect of the early disclosure requirement imposed by Federal Rule of Civil Procedure 26(a) on a set of litigation outcomes. I do this by using a set of research designs that includes the semi-parametric estimation of the density of civil suit durations. I find evidence that early disclosure is correlated with increases in the time until suit disposition, no change in the density of settlement delays, and surprisingly, an increase in the probabilities of both settlement and trial. The third essay presents a framework that uses the tools of psychological game theory to model attitudes about price discrimination. This framework reflects evidence from legal rules and surveys that differential pricing, across time or people, is something that typically needs to be justified. While differences in circumstances sometime justify differential treatment, it matters crucially how those different circumstances came about. Differences attributable to one's own actions, or good luck, do not justify differential economic treatment. Differences attributable to the actions of others, or bad luck, do justify differential treatment. I explore implications of these attitudes in settings of both perfect and imperfect information.