Psychology, Morality, and (Public) Law: The Role of Loss Aversion

Freiburger Vorträge zur Staatswissenschaft und Rechtsphilosophie

Vortrag gehalten am 2. Juli 2014 Zur Person: Eyal Zamir ist Professor für Wirtschaftsrecht an der Hebräischen Universität Jerusalem und Direktor der Aharon-Barak-Forschungsstelle für Interdisziplinäre Rechtsstudien. Er erlangte einen Bachelor in Rechtswissenschaften (LL.B.) an der Hebräischen Universität Jerusalem, wo er zudem in Rechtswissenschaften promovierte und sich habilitierte. Eyal Zamir war Gastprofessor an den Universitäten Harvard, Yale, NYU, Georgetown, UCLA, Zürich und am Max-Planck-Institut für Ökonomik in Jena. Des Weiteren gab er dreizehn Werke heraus (drei von diesen mit der Oxford University Press) und veröffentlichte zahlreiche Artikel in israelischen und amerikanischen rechtswissenschaftlichen Fachzeitschriften (u.a. „Columbia Law Review“, „Journal of Legal Studies“, „California Law Review“, „Virginia Law Review“ und „American Journal of International Law“). Abstract: Why are civil and political rights accorded much greater constitutional protection than social and economic rights? Why do constitutions limit the state’s power to take private property but hardly limit its power to confer property to private entities, or require them to charge recipients for such benefits? What might explain the fact that affirmative action plans refer to benefits that people do not yet have, such as getting a job, but rarely, if ever, dictate that an employee who already occupies a certain position should vacate it for someone else? How come immigration and refugee law (and even more so—immigration and refugee practice) treat refugees and asylum seekers who have already entered a state’s territory—lawfully or not—rather differently than those who seek entry? While not trying to give a comprehensive answer to these questions, I will argue that there is a common denominator to these and other puzzles (including ones that arise in private law, such as the centrality of tort law versus the relative marginality of unjust enrichment law): they are all best answered on the basis of loss aversion. Psychological studies have established that people do not perceive outcomes as final states of wealth or welfare. Rather, they perceive them as gains and losses, and losses ordinarily loom larger than gains. Loss aversion is thus related to fundamental legal issues. I will also strive to explain the compatibility between loss aversion and the law. According to an evolutionary theory, since losses are more painful than unattained gains, people file lawsuits when they experience a loss much more often than when the fail to obtain a gain. Consequently, legal doctrines dealing with the former are much more developed. Another theory focuses on the mindset of legal policymakers. Legal thinking largely follows deontological morality. As such, it distinguishes between harming people and not aiding them. This theory highlights an important correspondence between psychology, morality, and law. Finally, I will touch upon the normative implications of loss aversion. Among other things, I will argue that, ceteris paribus, the law should favor not-giving over taking. Lawmakers should also consider the framing effect of legal norms and the impact of loss aversion on policymaking.