Review of Law and Economics, Vol. 1, pp. 203-240 (2005)
Many legal rules can be interpreted as creating options. Option pricing is thus important for understanding the ex ante effects of these rules. And, recognizing that individuals, whose behavior the law aims to influence, are imperfectly rational, a behavioral option pricing model is a potentially helpful tool for legal policy. This paper develops such a model and applies it to a series of legal problems in tort law, contract law, corporate law and criminal law.
Date of Authorship for this Version
Options, behavioral law and economics, optimism, overconfidence
Bar-Gill, Oren, "PRICING LEGAL OPTIONS: A BEHAVIORAL PERSPECTIVE" (2005). New York University Law and Economics Working Papers. Paper 17.