Faculty Bibliography

For over two decades, federal agencies have been required to analyze the benefits and costs of significant regulatory actions and to show that the benefits justify the costs. But the regulatory state continues to suffer from significant problems, including poor priority-setting, unintended adverse side-effects, and, on occasion, high costs for low benefits. In many cases, agencies do not offer an adequate account of either costs or benefits, and hence the commitment to cost-benefit balancing is not implemented in practice. A major current task is to ensure a deeper and wider commitment to cost-benefit analysis, properly understood. We explain how this task might be accomplished and offer a proposed executive order that would move regulation in better directions. In the course of the discussion, we explore a number of pertinent issues, including the actual record of the last two decades, the precautionary principle, the value of prompt letters the role of distributional factors, and the need to incorporate independent agencies within the system of cost-benefit balancing

Over the past two decades, the United States has seen a dramatic increase in the number and magnitude of punitive damages verdicts rendered by juries in civil trials. Probably the most extraordinary example is the July 2000 award of $144.8 billion in the Florida class action lawsuit brought against cigarette manufacturers. Or consider two recent verdicts against the auto manufacturer BMW in Alabama. In identical cases, argued in the same court before the same judge, one jury awarded $4 million in punitive damages, while the other awarded no punitive damages at all. In cases involving accidents, civil rights, and the environment, multimillion-dollar punitive awards have been a subject of intense controversy. But how do juries actually make decisions about punitive damages? To find out, the authors-experts in psychology, economics, and the law-present the results of controlled experiments with more than 600 mock juries involving the responses of more than 8,000 jury-eligible citizens. Although juries tended to agree in their moral judgments about the defendant's conduct, they rendered erratic and unpredictable dollar awards. The experiments also showed that instead of moderating juror verdicts, the process of jury deliberation produced a striking "severity shift" toward ever-higher awards. Jurors also tended to ignore instructions from the judges; were influenced by whatever amount the plaintiff happened to request; showed "hindsight bias," believing that what happened should have been foreseen; and penalized corporations that had based their decisions on careful cost-benefit analyses. While judges made many of the same errors, they performed better in some areas, suggesting that judges (or other specialists) may be better equipped than juries to decide punitive damages. Using a wealth of new experimental data, and offering a host of provocative findings, this book documents a wide range of systematic biases in jury behavior. It will be indispensable for anyone interested not only in punitive damages, but also jury behavior, psychology, and how people think about punishment.

There is a standard analysis of default rules in contract law, including those forms of contract law that fall under the label of employment law. But behavioral economics raises many complications. The default rule can create an endowment effect, making employees value certain rights more simply because they have been granted such rights in the first instance. Similarly, the default rule for savings plans, set by employers or law, seems to have a large effect on employee behavior. When the default rule affects preferences and behavior, conventional economic analysis seems indeterminate; either default rule can be efficient. In employment law, analysis of distributive consequences also suggests the difficulty of deciding which default rule to favor, because any switch in the rule is unlikely to have significant redistributive effects. Nonetheless, switching the default rule can, in certain circumstances, have desirable effects on workers' welfare. A central question is whether the stickiness of the default rule reflects a genuine change in values, or instead employee confusion or bargaining strategy.

Focuses on social dynamics as a factor in the occurrence of the September 11, 2001 terrorist attack in the U.S. Research on the relationship of individual and group judgments; Concept of polarization in terrorist organizations; Discussion on the Al Qaeda terrorist movement.

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President Bush's Military Order establishing Military Commissions was greeted with impassioned criticism in the press, the legal academy, and Congress. Sixty years earlier, in the midst of World War II, President Roosevelt established a Military Commission to try eight Nazi agents who had covertly entered the United States to commit acts of sabotage and terrorism. Although the Nazis failed in their mission, their aims were similar to those of the 9/11 terrorists. And yet Roosevelt's creation of the Commission, and the subsequent secret trial of the Nazi saboteurs, received widespread praise from the same institutions that protested Bush's action. Our purpose in this paper is not to investigate, except in passing, issues of law and policy. We instead explore three other questions: What explains the dramatically different reactions? What lessons do the different reactions offer about changes, over time, in the legal culture and in culture in general? What lessons do they offer about the evolution of protections for civil liberties in general and during wartime in particular? The most tempting, and common, explanation for the different reactions is that there is a significant difference in law - that President Roosevelt's Order stands on much firmer legal ground than President Bush's order. We show that this and related explanations are weak. The different reactions are best explained in terms of two large differences between the United States of 1942 and the United States of 2001. In 1942, the nation perceived a far greater threat to its own survival; for this reason Americans were far less solicitous of the interests of defendants thought to have participated in a war effort against the United States. But this explanation is inadequate by itself. It must be supplemented with an understanding of the large-scale, post-1960s shift in American attitudes, involving decreased trust of executive authority and military authority. Our general claim is that with respect to these issues, the legal culture is fundamentally different from what it was before, so much so that many previous practices are barely recognizable. We use the different reactions to the Bush and Roosevelt Military Orders as a way of obtaining a window on this shift. After making out these claims, we conclude with some general reflections on the evolution of civil liberties protections during wartime. In particular, we identify a mechanism behind the trend toward greater protection for civil liberties during wartime, namely: A judgment, in hindsight, that past civil liberty intrusions were unnecessary or excessive. We also suggest that this trend is, in a way, an accident of America's distinctive history.

The phenomenon of group polarization means that the members of a deliberating group predictably move toward a more extreme point in the direction of their pre-deliberation views. This phenomenon raises serious questions about the potential dangers of deliberation, even in some democratic settings.

What should be done about airplane safety and terrorism, global warming, polluted water, nuclear power, and genetically engineered food? Decision-makers often respond to temporary fears, and the result is a situation of hysteria and neglect--and unnecessary illness and death. Risk and Reason explains the sources of these problems and explores what can be done about them. It shows how individual thinking and social interactions lead us in foolish directions. Offering sound proposals for social reform, it explains how a more sensible system of risk regulation, embodied in the idea of a "cost-benefit state," could save many thousands of lives and many billions of dollars too--and protect the environment in the process.

This book discusses the current topic of Federal Government regulations increasingly assessed by asking whether the benefits of the regulation justifies the cost of the regulation.

Review of The Perception of Risk, by Paul Slovic (2000).

Can computers, or artificial intelligence, reason by analogy? This essay urges that they cannot, because they are unable to engage in the crucial task of identifying the normative principle that links or separates cases. Current claims, about the ability of artificial intelligence to reason analogically, rest on an inadequate picture of what legal reasoning actually is. For the most part, artificial intelligence now operates as a kind of advanced version of LEXIS, offering research assistance rather than analogical reasoning. But this is a claim about current technology, not about inevitable limitations of artificial intelligence; things might change in the future.

The legal system should rely much more than it now does on statistical evidence. It should be cautious about the judgments of experts, who make predictable cognitive errors. Like everyone else, experts have a tendency to blunder about risk, a point that has been shown to hold for doctors, whose predictions significantly err in the direction of optimism. We present new evidence that individual doctors' judgments about the ordinary standard of care are incorrect and excessively optimistic. We also show how this evidence bears on legal determinations of negligence, by doctors and others.

Though George W. Bush took office in January, the nation is still recovering from the prolonged and complex process by which he was elected. The Florida electoral controversy and the subsequent decisions by both the Florida courts and the U.S. Supreme Court left citizens and scholars alike divided over the role of the judiciary in the electoral arena. Now, after a few months of reflection, leading constitutional scholarsCass R. Sunstein, Richard A. Epstein, Pamela S. Karlan, Richard A. Posner, and John Yoo, among others—weigh in on the Supreme Court's actions, which remain sensible, legally legitimate, and pragmatically defensible to some and an egregious abuse of power to others. Representing the full spectrum of views and arguments, The Vote offers the most timely and considered guide to the ultimate consequences and significance of the Supreme Court's decision. The contributors to this volume were highly visible in the national media while the controversy raged, and here they present fully fleshed-out arguments for the positions they promoted on the airwaves. Readers will find in The Vote equally impassioned defenses for and indictments of the Court's actions, and they will come to understand the practical and theoretical implications of the Court's ruling in the realms of both law and politics. No doubt a spate of books will appear on the 2000 presidential election, but none will claim as distinguished a roster of contributors better qualified to place these recent events in their appropriate historical, legal, and political contexts. Leading constitutional scholars render their verdicts on the 2000 presidential election controversy

"In modern nations, political disagreement is the source of both the gravest danger and the greatest security," writes Cass Sunstein. All democracies face intense political conflict. But is this conflict necessarily something to fear? In this provocative book, one of our leading political and legal theorists reveals how a nation's divisions of conviction and belief can be used to safeguard democracy. Confronting one explosive political issue after another, from presidential impeachment to the limits of religious liberty, from discrimination against women and gays to the role of the judiciary, Sunstein constructs a powerful new perspective from which to show how democracies negotiate their most divisive real-world problems. He focuses on a series of concrete concerns that go to the heart of the relationship between the idea of democracy and the idea of constitutionalism. Illustrating his discussion with examples from constitutional debates and court-cases in South Africa, Eastern Europe, Israel, America, and elsewhere, Sunstein takes readers through a number of highly charged questions: When should government be permitted to control discriminatory behavior by or within religious organizations? Does it make sense to govern on the basis of popular referenda? Can the right to have an abortion be defended? Can we defend Internet regulation? Should the law step in if children are being schooled in discriminatory preferences and beliefs? Should a constitution protect rights to food, shelter, and health care? Disputes over questions such as these can be fierce enough to pose a grave threat. But in a paradox whose elaboration forms the core of Sunstein's book, it is a nation's apparently threatening diversity of opinion that can ensure its integrity. Extending his important recent work on the way deliberation within like-minded groups can produce extremism, Sunstein breaks new ground in identifying the mechanisms behind political conflict in democratic nations. At the same time, he develops a profound understanding of a constitutional democracy's system of checks and balances. Sunstein shows how a good constitution, fostering a "republic of reasons," enables people of opposing ethical and religious commitments to reach agreement where agreement is necessary, while making it unnecessary to reach agreement when agreement is impossible.

Do social and economic rights belong in a democratic constitution? Skeptics have wondered whether it is possible to constitutionalize such rights without imposing an untenable managerial responsibility on courts. In an extraordinary decision, the Constitutional Court of South Africa has provided a new approach to social and economic rights, one that respects the fact of limited resources while also requiring governmental attention to basic needs. This new approach might be called an administrative law model of constitutional rights. It contains considerable promise, because it recognize rights to reasonable programs, rather than to protection of each individual, a path that might well be beyond governmental capacities.

Inequalities often persist because both the advantaged and the disadvantaged stand to lose from change. Despite the probability of loss, moral indignation can lead the disadvantaged to seek to alter the status quo, by encouraging them to sacrifice their material self-interest for the sake of equality. Experimental research shows that moral indignation, understood as a willingness to suffer in order to punish unfair treatment by others, is widespread. It also indicates that a propensity to apparently self-defeating moral indignation can turn out to promote people’s material self-interest, if and because others will anticipate their actions. But potential rebels face collective action problems. Some of these can be reduced through the acts of “indignation entrepreneurs,” giving appropriate signals, organizing discussions by like-minded people, and engaging in acts of self-sacrifice. Law is relevant as well. By legitimating moral indignation and dissipating pluralistic ignorance, law can intensify and spread that indignation, thus increasing its expression. Alternatively, law can delegitimate moral indignation, or at least raise the cost of its expression, thus stabilizing a status quo of inequality. But the effects of law are unpredictable, in part because it will have moral authority for some but not for others; here too heterogeneity is an issue both for indignation entrepreneurs and their opponents. Examples are given from a range of areas, including labor-management relations, sexual harassment, civil rights, and domestic violence.

In an important but thus far unnoticed development, federal courts have created a new series of "default principles" for statutory interpretation, authorizing regulatory agencies, when statutes are unclear, (a) to exempt trivial risks from regulation and thus to develop a kind of common law of "acceptable risks," (b) to take account of substitute risks created by regulation, and thus to engage in "health-health" tradeoffs, (c) to consider whether compliance with regulation is feasible, (d) to take costs into account, and (e) to engage in cost-benefit balancing, and thus to develop a kind of common law of cost-benefit analysis. These cost-benefit default principles are both legitimate and salutary, because they give rationality and sense the benefit of the doubt. At the same time, they leave many open questions. They do not say whether agencies are required, and not merely permitted, to go in the direction they indicate; they do not indicate when agencies might reasonably reject the principles; and they do not say what, specifically, will be counted as an "acceptable" risk or a sensible form of cost-benefit analysis. Addressing the open questions, this essay urges that the principles should ordinarily be taken as mandatory, not merely permissive; that agencies may reject them in certain identifiable circumstances; and that steps should be taken toward quantitative analysis of the effects of regulation, designed to discipline the relevant inquiries. An understanding of these points should promote understanding of emerging "second generation" debates, involving not whether to adopt a presumption in favor of cost-benefit balancing, but when the presumption is rebutted, and what, in particular, cost-benefit analysis should be taken to entail.

One of the characteristics of a free society should be a strong presumption in favor of full patient control over personal information. The presumption is rebutted when disclosure to others is necessary (1) for good patient care, as in the case of consultations and medical teams; (2) to compile information that will produce scientific or medical progress; (3) to protect third parties from serious risks of harm; and (4) to prevent harm to patients themselves. In all of these cases, identifying information should be removed unless it is necessary. Principles of this sort should be implemented via physician norms, in fact publicly acknowledged physician norms, and (only) if necessary, by more formal regulations, private and public.

The most fundamental issues in labor and employment law involve the choice among three alternatives: waivable employers' rights, waivable employees' rights, and nonwaivable employees' rights. By combining standard contract analysis with a perspective informed by behavioral economics, it is possible to obtain a much better understanding of the underlying issues. Contrary to the conventional view: workers are especially averse to losses, and not so much concerned with obtaining gains; workers often do not know about legal rules, including key rules denying them rights; workers may well suffer from excessive optimism; workers care a great deal about fairness, and are willing to punish employers who have treated them unfairly, even at workers' own expense; many workers greatly discount the future; and workers often care about relative economic position, not absolute economic position. These points suggest the advantages, in many cases, of relying on waivable employees' rights, an approach designed to inform workers without providing the rigidity and inefficiency associated with nonwaivable terms. At the same time, these points suggest, though more ambiguously, the hazards of allowing workers to waive their rights in accordance with standard contract principles. Procedural constraints (e.g., cooling off periods) and substantive constraints (e.g., "floors") on waiver may be appropriate. Norm change and preference change are also discussed. Applications include job security; parental leave; vacation time; health care; unionization; occupational safety and health; discrimination on the basis of age, race, and sex; waivers by unions; and workers' compensation. The basic conclusion is that waivable employees' rights are a promising and insufficiently explored option in many areas of labor and employment law.

Like everyone else, academics are susceptible to informational and reputational signals. Sometimes academics lack confidence in their methods and beliefs, and they pay a great deal of attention to the methods and beliefs of others. The academic study of law is particularly subject to cascade effects, as people follow signals that they participate in amplifying. Some of these effects run their course quickly, whereas others last a long time. Leaders can play a special role in starting and stopping cascades; external shocks play a special role in the academic study of law; sometimes like-minded people within academia move one another to extremes. This informal essay, the Foreword to the forthcoming annual book review issue of the Michigan Law Review, discusses these points in a tentative and impressionistic way, with brief comparisons to other fields.

Whitman v. American Trucking Association was one of the most eagerly awaited regulatory decisions in many years. But the Court's understated, steady, lawyerly opinion was a bit of an anticlimax, representing a return to normalcy and leaving many open questions. The Court was correct to say that the relevant provision of the Clean Air Act forbids consideration of cost; it was also correct to refuse to invoke the nondelegation doctrine. Importantly, the Court left in place a set of important lower court decisions, allowing agencies to consider costs unless Congress expressly concludes otherwise. The Court also raised some new questions about the constitutional status of the Occupational Safety and Health Act. Perhaps most important, the Court has not ruled out nonconstitutional challenges to the particulates and ozone standards, or to ambient air quality standards generally. In suggesting that some of those challenges should succeed, especially against the new ozone regulation, this essay urges that Justice Breyer's concurring opinion in the case may well be the most influential in the future, because it fits most comfortably with other trends in the law of risk regulation, signaling the emergence of a kind of "cost-benefit state."

See only what you want to see, hear only what you want to hear, read only what you want to read. In cyberspace, we already have the ability to filter out everything but what we wish to see, hear, and read. Tomorrow, our power to filter promises to increase exponentially. With the advent of the Daily Me, you see only the sports highlights that concern your teams, read about only the issues that interest you, encounter in the op-ed pages only the opinions with which you agree. In all of the applause for this remarkable ascendance of personalized information, Cass Sunstein asks the questions, Is it good for democracy? Is it healthy for the republic? What does this mean for freedom of speech? Republic.com exposes the drawbacks of egocentric Internet use, while showing us how to approach the Internet as responsible citizens, not just concerned consumers. Democracy, Sunstein maintains, depends on shared experiences and requires citizens to be exposed to topics and ideas that they would not have chosen in advance. Newspapers and broadcasters helped create a shared culture, but as their role diminishes and the customization of our communications universe increases, society is in danger of fragmenting, shared communities in danger of dissolving. In their place will arise only louder and ever more extreme echoes of our own voices, our own opinions. In evaluating the consequences of new communications technologies for democracy and free speech, Sunstein argues the question is not whether to regulate the Net (it's already regulated), but how; proves that freedom of speech is not an absolute; and underscores the enormous potential of the Internet to promote freedom as well as its potential to promote "cybercascades" of like-minded opinions that foster and enflame hate groups. The book ends by suggesting a range of potential reforms to correct current misconceptions and to improve deliberative democracy and the health of the American republic.

Cost‐benefit analysis is often justified on conventional economic grounds, as a way of preventing inefficiency. But it is most plausibly justified on cognitive grounds—as a way of counteracting predictable problems in individual and social cognition. Poor judgments, by individuals and societies, can result from certain heuristics, from informational and reputational cascades, from thinking processes in which benefits are “on screen” but costs are not, from ignoring systemic effects of one‐shot interventions, from seeing cases in isolation, and from intense emotional reactions. Cost‐benefit analysis serves as a corrective to these cognitive problems. In addition, it is possible to arrive at an incompletely theorized agreement on cost benefit analysis—an agreement that does not depend on controversial arguments (for example, the view that willingness to pay should be the basis for all social outcomes) and that can attract support from a variety of reasonable views. There is discussion as well of the role of distributional weights and other equitable factors in cost‐benefit analysis. The conclusion is that the best argument for cost‐benefit analysis is rooted in cognitive psychology and behavioral economics.

From the legal point of view, there is nothing at all new or unfamiliar in the idea of "animal rights;" on the contrary, it is entirely clear that animals have legal rights. Indeed, the rise of legal rights for animals has been one of the most distinctive features of the last thirty years of federal statutory law. An investigation of the question of standing helps show that the real issues involve problems of enforcement and scope. Human beings often do and should have standing to protect animal rights; animals lack such standing, but only because Congress has failed to give them standing. Animal welfare statutes should be amended to grant a private cause of action, to human beings and animals alike, against those who violate them, so as to allow private claimants to supplement agency enforcement efforts. This modest step could do a great deal to prevent the unjustified suffering of animals.

How does jury deliberation affect the pre-deliberation judgments of individual jurors? In this paper we make progress on that question by reporting the results of a study of over 500 mock juries composed of over 3000 jury eligible citizens. Our principal finding is that with respect to dollars, deliberation produces a "severity shift," in which the jury's dollar verdict is systematically higher than that of the median of its jurors' predeliberation judgments. A "deliberation shift analysis" is introduced to measure the effect of deliberation. The severity shift is attributed to a "rhetorical asymmetry," in which arguments for higher awards are more persuasive than arguments for lower awards. When judgments are measured not in terms of dollars but on a rating scale of punishment severity, deliberation increased high ratings and decreased low ratings. We also find that deliberation does not alleviate the problem of erratic and unpredictable individual dollar awards, but in fact exacerbates it. Implications for punitive damage awards and deliberation generally are discussed.

Contrary to a common picture of relationships in a market economy, people often express communal and membership-seeking impulses via consumption choices, purchasing goods and services because other people are doing so as well. Shared identities are maintained and created in this way. Solidarity goods are goods whose value increases as the number of people enjoying them increases. Exclusivity goods are goods whose value decreases as the number of people enjoying them increases. Distinctions can be drawn among diverse value functions, capturing diverse relationships between the value of goods and the value of shared or unshared consumption. Though markets spontaneously produce solidarity goods, individuals sometimes have difficulty in producing such goods on their own, or in coordinating on choosing them. Here law has a potential role. There are implications for trend setting, clubs, partnerships, national events, social cascades, and compliance without enforcement.

"This exciting volume marks the birth of a new field, one which attempts to study law with reference to an accurate understanding of human behavior. It reports new findings in cognitive psychology which show that people are frequently both unselfish and over-optimistic; that people have limited willpower and limited self-control; and that people are 'boundedly' rational, in the sense that they have limited information-processing powers, and frequently rely on mental short-cuts and rules of thumb. Understanding this behavior has large-scale implications for the analysis of law, in areas including environmental protection, taxation, constitutional law, voting behavior, punitive damages for civil rights violations, labor negotiations, and corporate finance. With a better knowledge of human behavior, it is possible to predict the actual effects of law, to see how law can promote society's goals, and to reassess the questions of what law should be doing." --Publisher

How is constitution-making possible, when people disagree on so many questions about what is good and what is right? The answer lies in the existence of incompletely theorized agreements–agreements on abstract formulations (freedom of speech, equality under the law) and on particular practices, amidst disagreement about the largest issues in social life. Such agreements help make constitutions and constitutional law possible, even within nations whose citizens cannot concur on the most fundamental matters. Incompletely theorized agreements thus help illuminate an enduring constitutional puzzle: how members of diverse societies can work together on terms of mutual respect amidst intense disagreements about both the right and the good.

Reports of the death of the nondelegation doctrine have been greatly exaggerated. Rather than having been abandoned, the doctrine has merely been renamed and relocated. Its current home consists of a set of nondelegation canons, which forbid executive agencies from making certain decisions on their own. These canons forbid extraterritorial application of national law, intrusions on state sovereignty, decisions harmful to Native Americans, and absolutist approaches to health and safety. The nondelegation canons are far preferable to the old nondelegation doctrine, because they are subject to principled judicial application, and because they do not threaten to unsettle so much of modern government.