Working Paper: NBER ID: w19695
Authors: Pedro Bordalo; Nicola Gennaioli; Andrei Shleifer
Abstract: We present a model of judicial decision making in which the judge overweights the salient facts of the case. The context of the judicial decision, which is comparative by nature, shapes which aspects of the case stand out and draw the judge's attention. By focusing judicial attention on such salient aspects of the case, legally irrelevant information can effect judicial decisions. Our model accounts for a range of recent experimental evidence bearing on the psychology of judicial decisions, including anchoring effects in the setting of damages, decoy effects in choice of legal remedies, and framing effects in the decision to litigate. The model also offers a new approach to positive analysis of damage awards in torts.
Keywords: Judicial Decision Making; Salience Theory; Psychology of Law; Anchoring Effects; Legal Remedies
JEL Codes: D03; K13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| salience of potential losses (G41) | higher punitive damages (K13) |
| context of the case (K41) | inflated damage assessments (H84) |
| irrelevant anchor (Y60) | lower compensation estimates (J31) |