Guest Post: Behavioral International Law and Economics: Benchmark and Applications

by Anne van Aaken

[Prof. Dr. Anne van Aaken is Professor of Law and Economics, Legal Theory, Public International Law and European Law at the University of Sankt Gallen, Switzerland.]

I am delighted that Tomer Broude commented on Opinio Juris on the potential and the pitfalls of the use of behavioral economics in international law and am equally happy that I am able to follow up on this. I will do so in two steps: the first part will address the benchmark against which Behavioral International Law and Economics (BIntLE) should be measured in my view. The second mentions some of the applications I suggest in my paper and in an earlier article. Tomer and I are currently planning a book together, bringing together the insights of both of our papers and extending them considerably.

In his introduction to the topic, Tomer comments on the relationship of “Behavioral International Law” to rational choice approaches in international law and international relations.

Behavioral Economics is an empirically validated theory about human behavior. There are of course competing theories in social science. The psychological research is not free-floating and it is not used as such in the field of international law and international relations. Tomer suggests as a basis from which to depart sociological approaches. Sociology as such does not have a unified behavioral model, thus one would need to clarify which sociological theories are drawn upon (e.g. the homo sociologicus as advanced by Ralf Dahrendorf (micro theory of individual behavior), system theory (macro theory), etc.). I suggest as a benchmark rational choice theory, for two reasons.  First, the psychological insights we use are commonly named behavioral economics, given that this research tests and challenges the rational choice hypothesis to a hitherto unknown extent (and the psychologist Daniel Kahneman won the Nobel prize in economics). But behavioral economics is not yet at a stage where it has a unified behavioral theory replacing rational choice: many heuristics and biases depend on the decision-making context (those have to be studied carefully). Rational choice is still the benchmark against which the insights are measured. Second, the parsimony of rational choice makes it a natural starting point. Since behavioral research adds complexity (something which every academic should try to avoid if a simpler explanation is possible for answering a certain research question), it has to show that it generates better insights and is able to explain phenomena which cannot be explained drawing on the rational choice approach alone. To use a coin minted by Einstein: “Everything should be as simple as it can be, but not simpler.” A rational choice approach might sometimes be too simple. Tomer and I share the belief that behavioral economics is able to generate more and better insights to the functioning of international law and we share also the deliberations on the methodological problems this might generate. Because of the weight I put on parsimony, I shift the burden of proof on BintLE to show that it might generate better insights than a rational choice approach to international law. This has to be done step by step, analyzing different fields of general and special international law. After all, it will be the empirics which will validate (or not) the research hypotheses advanced by any theory: the proof of the pudding is in the eating.

Having said that, let me turn to some promising insights, adding to Tomer´s suggestions in his paper and his post. (more…)

Behavioral International Law: What Is It Good For?

by Tomer Broude

[Tomer Broude is Vice-Dean and Sylvan M. Cohen Chair in Law at the Faculty of Law and Department of International Relations at the Hebrew University of Jerusalem.]

Having set out general considerations and a research methodology framework for “Behavioral International Law” in previous posts, some readers might be wondering how this all cashes out for international law as a discipline?

In their path-breaking 1999 YJIL article on economic analysis of international law, Jeffrey Dunoff and Joel Trachtman noted that “almost every international law research subject could be illuminated, to some degree, by these research methods” [referring to economic analysis]. With similar caveats, it is tempting to say something similar and related about behavioral analysis and international law. Behavioral international law is not a ‘theory of everything’. Neither is it a normative framework of analysis, as such. But properly constructed behavioral research selectively employing the methodologies I describe here can significantly increase our knowledge in all areas of international law, with respect to many problems and puzzles.

In my article, I developed three examples that cover the entire spectrum of levels of analysis as well as research methodologies. In all of them, a mere theoretical application is sufficient to stimulate discussion by posing alternative hypotheses and explanations, but if one is concerned with empirical accuracy, field studies and experimental work is necessary. Moreover, the examples – essentially three mini-articles – cover diverse areas of international law (treaty law, WTO dispute settlement and international humanitarian law). I will briefly summarize two examples.  (more…)

Behavioral International Law: A Methodological Framework

by Tomer Broude

[Tomer Broude is Vice-Dean and Sylvan M. Cohen Chair in Law at the Faculty of Law and Department of International Relations at the Hebrew University of Jerusalem.]

In my previous post, I tried to briefly introduce the merits of “Behavioral International Law”. Experimental research has shown that in many cases human behavior diverges from theoretical assumptions about rationality. Prospect theory, loss aversion, endowment effects, anchoring, hindsight bias, availability bias, conformity effects, framing effects – the list of experimentally proven, systematic diversions from perfect rationality in human behavior is long. The confines of a blog post preclude detailed discussion of any of these biases and heuristics; the literature in cognitive psychology is vast. The important point, pursued by scholars over the last decade or so, is that this knowledge of actual, rather than hypothesized or assumed, human behavior, can have significant implications for legal regulation. Why should this not be the case with respect to public international law?

A number of objections may arise, and I will mention two of them briefly here. The first would be that cognitive psychology and behavioral economics relate primarily to the conduct of individuals as (obviously) unitary actors, while the main subjects of international law are collective entities, primarily states. This presents a type of external validity problem: can the knowledge we have on human behavior, carry over to other actors? (more…)

Behavioral International Law: An Introduction

by Tomer Broude

[Tomer Broude is Vice-Dean and Sylvan M. Cohen Chair in Law at the Faculty of Law and Department of International Relations at the Hebrew University of Jerusalem.]

I’d like first to thank the Opinio Juris team, and particularly Prof. Chris Borgen, for inviting me to present my article manuscript, “Behavioral International Law”, in this online forum. Today I will devote my post to general observations on this project. In my second post I will discuss the range of available research methodologies in this area. A third post will discuss some concrete examples of behavioral research in international law.

Behavioral science has in recent years been applied successfully to many legal issues. A field that just a decade ago was entirely new now merits its own research handbooks (one forthcoming with OUP in 2014, edited by my Hebrew University colleagues Doron Teichman and Eyal Zamir). Behavioral research is now embedded in national and regulatory policy-making that clearly interacts with international affairs (see Cass Sunstein’s article on “Nudges.gov” here; the UK’s Behavioural Insights Team; and this conference in December on EU law and behavioral science). No less importantly, the groundbreaking work of cognitive psychologists such as Daniel Kahneman and the late Amos Tversky has been greatly popularized in a series of popular science books (see here, here, and here), making it more accessible to lawyers and policy-makers (for better or for worse).

Simplified, the central concept underlying research in this field is the recognition that human cognitive capabilities are not perfect or infinite; our rationality is ‘bounded’. The human brain makes shortcuts in judgment and decision-making that diverge from expected utility theory. Limiting aspects of bounded rationality and the shortcuts taken to overcome them – generally known as biases and heuristics – inevitably cause human decisions that would be regarded as erroneous if compared with theoretically/perfectly rational outcomes. As I explain in the article, this should at least give pause to standard rational choice approaches to law in general and international law in particular, whose assumptions about the rationality of states and other actors are often distant from behavioral realities.

Having said this, it is important to understand that behavioral economics does not aspire to replace one ideal-type decision maker (a perfectly rational one) with another (rationally imperfect) one. (more…)