Economic Analysis of International Law

Economic Analysis of International Law

Edited by Eugene Kontorovich and Francesco Parisi

Through original and incisive contributions from leading scholars, this book applies economics and other rational choice methods to understanding public international law. The chapters cover a range of topics, from the sources of international law to means of enforcement. The application of economic analysis to public international law is still in its early stages, and Economic Analysis of International Law provides a useful overview, as well as setting directions for new research.

Chapter 10: Behavioral economic analysis of international law

Anne van Aaken and Tomer Broude

Subjects: economics and finance, law and economics, law - academic, law and economics, public international law


Over the last decade or so, numerous compelling analyses of a broad range of questions relating to international law and institutions have built on particular assumptions of what may be termed ‘perfect’ rationality, roughly conforming to Rational Choice (RC) theory. This is the growing field of economic analysis of public international law, to which the majority of contributions in the present book squarely belong. In many other areas of legal scholarship, however, the value and validity of applying such forms of RC theory to legal and societal questions – generally referred to as ‘Law and Economics’ (L & E) – has no less recently been questioned and contested by empirically grounded streams of cognitive psychology and behavioral economics (Colin 1999; Rabin 1998). These alternative approaches focus on observable, systematic, divergences from the perfect rationality assumed by standard RC (Ulen and Korobkin 2000; Zamir and Teichman 2014). Surprisingly, with very few exceptions, these approaches have not been applied to international legal issues, and no comprehensive methodological framework has been provided for such international research. In this chapter, we explore the potential for the applicability of such behavioral economic analyses to international law. Generally, we contend that a behavioral economic approach, if employed properly and subject to appropriate methodological safeguards, can greatly contribute to international legal research, both by raising interesting hypotheses and theoretical applications relating to problems in international law and by providing frameworks for experimental and empirical testing, with significant explanatory and normative implications.

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