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Christoph Engel

Christoph Engel is Director of the Max Planck Institute for Research on Collective Goods, Bonn, and a member of the Faculty of Law and Economics at the University of Bonn. He is the author of Generating Predictability: Institutional Analysis and Design and other books.

Titles by This Editor

Decision Making, the Human Mind, and Implications for Institutions

Conscious control enables human decision makers to override routines, to exercise willpower, to find innovative solutions, to learn by instruction, to decide collectively, and to justify their choices. These and many more advantages, however, come at a price: the ability to process information consciously is severely limited and conscious decision makers are liable to hundreds of biases. Measured against the norms of rational choice theory, conscious decision makers perform poorly. But if people forego conscious control, in appropriate tasks, they perform surprisingly better: they handle vast amounts of information; they update prior information; they find appropriate solutions to ill-defined problems.

This inaugural Strüngmann Forum Report explores the human ability to make decisions, consciously as well as without conscious control. It explores decision-making strategies, including deliberate and intuitive; explicit and implicit; processing information serially and in parallel, with a general-purpose apparatus, or with task-specific neural subsystems. The analysis is at four levels—neural, psychological, evolutionary, and institutional—and the discussion is extended to the definition of social problems and the design of better institutional interventions. The results presented differ greatly from what could be expected under standard rational choice theory and deviate even more from the alternate behavioral view of institutions. New challenges emerge (for example, the issue of free will) and some purported social problems almost disappear if one adopts a more adequate model of human decision making.

In recent decades, the economists' concept of rational choice has dominated legal reasoning. And yet, in practical terms, neither the lawbreakers the law addresses nor officers of the law behave as the hyperrational beings postulated by rational choice. Critics of rational choice and believers in "fast and frugal heuristics" propose another approach: using certain formulations or general principles (heuristics) to help navigate in an environment that is not a well-ordered setting with an occasional disturbance, as described in the language of rational choice, but instead is fundamentally uncertain or characterized by an unmanageable degree of complexity. This is the intuition behind behavioral law and economics. In Heuristics and the Law, experts in law, psychology, and economics explore the conceptual and practical power of the heuristics approach in law. They discuss legal theory; modeling and predicting the problems the law purports to solve; the process of making law, in the legislature or in the courtroom; the application of existing law in the courts, particularly regarding the law of evidence; and implementation of the law and the impact of law on behavior.Contributors:Ronald J. Allen, Hal R. Arkes, Peter Ayton, Susanne Baer, Martin Beckenkamp, Robert Cooter, Leda Cosmides, Mandeep K. Dhami, Robert C. Ellickson, Christoph Engel, Richard A. Epstein, Wolfgang Fikentscher, Axel Flessner, Robert H. Frank, Bruno S. Frey, Gerd Gigerenzer, Paul W. Glimcher, Daniel G. Goldstein, Chris Guthrie, Jonathan Haidt, Reid Hastie, Ralph Hertwig, Eric J. Johnson, Jonathan J. Koehler, Russell Korobkin, Stephanie Kurzenhäuser, Douglas A. Kysar, Donald C. Langevoort, Richard Lempert, Stefan Magen, Callia Piperides, Jeffrey J. Rachlinski, Clara Sattler de Sousa e Brito, Joachim Schulz, Victoria A. Shaffer, Indra Spiecker genannt Döhmann, John Tooby, Gerhard Wagner, Elke U. Weber, Bernd Wittenbrink