Research Handbook on Behavioral Law and Economics
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Research Handbook on Behavioral Law and Economics

Edited by Joshua C. Teitelbaum and Kathryn Zeiler

The field of behavioral economics has contributed greatly to our understanding of human decision making by refining neoclassical assumptions and developing models that account for psychological, cognitive, and emotional forces. The field’s insights have important implications for law. This Research Handbook offers a variety of perspectives from renowned experts on a wide-ranging set of topics including punishment, finance, tort law, happiness, and the application of experimental literatures to law. It also includes analyses of conceptual foundations, cautions, limitations and proposals for ways forward.
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Chapter 6: Punishment, social norms, and cooperation

Erte Xiao

Abstract

How to design punishment mechanisms to maintain social order is a central question in law. Xiao reviews recent behavioral economic research on how punishment influences prosocial behavior, much of which provides evidence that punishment can have a negative effect on cooperation. She discusses several factors that can lead to the detrimental effect of punishment and suggests some solutions. She argues that the effectiveness of punishment is closely connected to its role in expressing social norms. She ends the chapter by reviewing some recent research on social norms and suggesting punishment and social norm instruments are complementary in promoting cooperation.

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