Debiasing through Law

Cass R. Sunstein
Christine Jolls


In many settings, human beings are boundedly rational. A distinctive and insufficiently explored legal response to bounded rationality is to attempt to debias through law by steering people in more rational directions. In many domains, existing legal analyses emphasize the alternative approach of insulating outcomes from the effects of boundedly rational behavior, which itself is taken as a given. In fact, however, many legal strategies are efforts to engage in the different approach of debiasing through law by reducing or even eliminating people's boundedly rational behavior. This paper offers a general account of how debiasing through law does or could work to address legal questions across a range of areas, from consumer safety law to corporate law to property law. Discussion is also devoted to the risks of government manipulation and overshooting that are sometimes raised when debiasing through law is employed.