Richard H Thaler - Misbehaving- The Making of Behavioral Economics (epub)

this point I had adopted the pedagogical device of calling these essential
elements “the three bounds”: bounded rationality, bounded willpower, and
bounded self-interest. In law and economics these properties of Humans had
heretofore been assumed to be thoroughly unbounded.
I ended up having to miss the conference, leaving Christine to give the talk
solo, but it went over well enough that we thought it was worth expanding into
an academic paper. We planned to get busy on that once we both settled into our
new jobs. She had been hired by Harvard Law School and would join their
faculty at the same time that I was arriving at Chicago.
The stars must have been in some kind of fortuitous alignment, because when
I arrived at Chicago, the first faculty member I met from outside the business
school was Cass Sunstein, a professor at the law school. Cass had already been
collaborating with Danny and was excited about behavioral economics. In the
world of academic law, Cass is a rock star. Although nominally his specialty is
constitutional law, he has written articles and books on nearly every branch of
the law, and is widely admired. We had lunch a couple times and hit it off well.
His enthusiasm is catching, and his encyclopedic knowledge is astonishing. At
some point I suggested to Christine that we should consider asking Cass to join
our behavioral law and economics project. It was not a hard sell. Adding Cass to
your research team is a bit like adding Lionel Messi to your pick-up soccer
game. Soon we were off and running. And I mean running, because Cass is fast.
It took only a few months for the three of us to produce a draft of a paper that
we titled “A Behavioral Approach to Law and Economics.” It was the longest
paper I have ever written. To law professors, the longer a paper is, the better, and
there can never be too many footnotes. The published version of the paper came
in at 76 pages and 220 footnotes, and it was only this short because I kept
complaining of its excessive length.
When we had a draft ready to submit for publication, I learned that the process
is very different in legal circles than in economics. In economics, you are only
allowed to submit your article to one journal at a time. If they reject it, you can
try another one. But law reviews allow authors to submit to several at once,
which we did. The Stanford Law Review was the first to get back to us with an
acceptance, and soon after another law review was expressing interest as well.
We had bargaining power, so I made a suggestion. Since the editors were so keen
to get this article, and it was bound to be controversial, why not get them to
solicit a commentary from a prominent representative of the law and economics
inner circle to be published in the same issue, with us having the opportunity to
reply? I had in mind how the debate with Merton Miller and his team had
attracted a lot of attention to the closed-end funds paper, and I thought this might