Showing papers by "Cass R. Sunstein published in 2007"

Republic.com 2.0

Abstract: What happens to democracy and free speech if people use the Internet to create echo chambers--to listen and speak only to the like-minded? What is the democratic benefit of the Internet's unlimited choices if citizens narrowly limit the information they receive, creating ever-smaller niches and fragmenting the shared public conversation on which democracy depends? Cass Sunstein first asked these questions before 9/11, in Republic.com, and they have become even more urgent in the years since. Now, in Republic.com 2.0, Sunstein thoroughly rethinks the critical relationship between democracy and the Internet in a world where partisan Web logs have emerged as a significant force in politics and where cyber-jihadists have embraced the Internet to thwart democracy and spread violence. Emphasizing the value of unplanned, unchosen encounters, the original Republic.com provoked a strong reaction from cyber-optimists. In Republic.com 2.0 Sunstein answers the critics and expands his argument to take account of new developments, including the blogosphere, and fresh evidence about how people are using the Internet. He demonstrates that the real question is how to avoid "information cocoons" and to ensure that the unrestricted choices made possible by technology do not undermine democracy. Sunstein also proposes new remedies and reforms--focusing far less on what government should do, and much more on what consumers and producers should do--to help democracy avoid the perils, and realize the promise, of the Internet.

Deliberating Groups Versus Prediction Markets (Or Hayek's Challenge to Habermas)

Abstract: For multiple reasons, deliberating groups often converge on falsehood rather than truth. Individual errors may be amplified rather than cured. Group members may fall victim to a bad cascade, either informational or reputational. Deliberators may emphasize shared information at the expense of uniquely held information. Finally, group polarization may lead even rational people to unjustified extremism. By contrast, prediction markets often produce accurate results, because they create strong incentives for revelation of privately held knowledge and succeed in aggregating widely dispersed information. The success of prediction markets offers a set of lessons for increasing the likelihood that groups can obtain the information that their members have.

Incompletely Theorized Agreements in Constitutional Law

Abstract: How is constitutionalism possible, when people disagree on so many questions about what is good and what is right? This essay, written for a special issue of Social Research on Difficult Decisions, explores the role of two kinds of incompletely theorized agreements amidst sharp disagreements about the largest issues in social life. The first consist of agreements on abstract formulations (freedom of speech, equality under the law); these agreements are crucial to constitution-making as a social practice. The second consist of agreements on particular doctrines and practices; these agreements are crucial to life and law under existing constitutions. Incompletely theorized agreements help illuminate an enduring constitutional puzzle: how members of diverse societies can work together on terms of mutual respect amidst intense disagreements about both the right and the good. Such agreements help make constitutions and constitutional law possible, even within nations whose citizens cannot concur on the most fundamental matters.

If People Would Be Outraged by Their Rulings, Should Judges Care?

Abstract: At first glance, it is puzzling to suggest that courts should care whether the public would be outraged by their decisions; judicial anticipation of public outrage and its effects seems incompatible with judicial independence. Nonetheless, judges might be affected by the prospect of outrage for both consequentialist and epistemic reasons. If a judicial ruling would undermine the cause it is meant to promote or impose serious social harms, judges have reason to hesitate on consequentialist grounds. The prospect of public outrage might also suggest that the Court's ruling would be incorrect on the merits; if most people disagree with the Court's decision, perhaps the Court is wrong. Those who adopt a method on consequentialist grounds are more likely to want to consider outrage than are those who adopt an interpretive method on nonconsequentialist grounds (including some originalists). The epistemic argument for attention to outrage is greatly weakened if people suffer from a systematic bias or if the public view is a product of an informational, moral, or legal cascade. There is also a strong argument for banning consideration of the effects of public outrage on rule-consequentialist grounds. Judges might be poorly suited to make the relevant inquiries, and consideration of outrage might produce undue timidity. These points have general implications for those who favor popular constitutionalism, or judicial restraint, on democratic grounds. An understanding of the consequentialist and epistemic grounds for judicial attention to public outrage also offers lessons for the decisions of other public officials, including presidents, governors, and mayors, who might be inclined to make decisions that will produce public outrage.

Worst-Case Scenarios

Abstract: Introduction 1. Of Terrorism and Climate Change 2. A Tale of Two Protocols 3. Catastrophe 4. Irreversibility 5. Money 6. The Future Conclusion Notes Acknowledgments Index

Cost-Benefit Analysis Without Analyzing Costs of Benefits: Reasonable Accommodation, Balancing, and Stigmatic Harms

Abstract: Is an accommodation reasonable, under the Americans with Disabilities Act, if and only if the benefits are roughly proportional to the costs? How should benefits and costs be assessed? Should courts asks about how much disabled employees are willing to pay to obtain the accommodation, or instead how much they would have to be paid not to have the accommodation? How should stigmatic or expressive harms be valued? This essay, written for a symposium on the work of Judge Richard A. Posner, engages these questions in a discussion of an important opinion in which Judge Posner denied accommodations involving the lowering of a sink in a kitchenette and a request for telecommuting. The problem with the analysis in that opinion is that it does not seriously analyze either costs or benefits. A general lesson is that while cost-benefit balancing can helpfully discipline unreliable intuitions about the effects of requested accommodations, it can also incorporate those intuitions. Another lesson is that stigmatic harms and daily humiliations deserve serious attention as part of the inquiry into which accommodations are reasonable, and that the removal of those harms and humiliations can create real benefits. Adequate cost-benefit analyses must attempt to measure and include those benefits.

The New Legal Realism

Abstract: The last decade has witnessed the birth of the New Legal Realism - an effort to go beyond the old realism by testing competing hypotheses about the role of law and politics in judicial decisions, with reference to large sets and statistical analysis. The New Legal Realists have uncovered a Standard Model of Judicial Behavior, demonstrating significant differences between Republican appointees and Democratic appointees, and showing that such differences can be diminished or heightened by panel composition. The New Legal Realists have also started to find that race, sex, and other demographic characteristics sometimes have effects on judicial judgments. At the same time, many gaps remain. Numerous areas of law remain unstudied; certain characteristics of judges have yet to be investigated; and in some ways, the existing work is theoretically thin. The New Legal Realism has clear jurisprudential implications, bearing as it does on competing accounts of legal reasoning, including Ronald Dworkin's suggestion that such reasoning is a search for integrity. Discussion is devoted to the relationship between the New Legal Realism and some of the perennial normative questions in administrative law.

Extremism and Social Learning

Abstract: When members of deliberating groups speak with one another, their predeliberation tendencies often become exacerbated as their views become more extreme. The resulting phenomenon - group polarization - has been observed in many settings, and it bears on the actions of juries, administrative tribunals, corporate boards, and other institutions. Polarization can result from rational Bayesian updating by group members, but in many contexts, this rational interpretation of polarization seems implausible. We argue that people are better seen as Credulous Bayesians, who insufficiently adjust for idiosyncratic features of particular environments and put excessive weight on the statements of others where there are 1) common sources of information; 2) highly unrepresentative group membership; 3) statements that are made to obtain approval; and 4) statements that are designed to manipulate. Credulous Bayesianism can produce extremism and significant blunders. We discuss the implications of Credulous Bayesianism for law and politics, including media policy and cognitive diversity on administrative agencies and courts.

The Real World of Arbitrariness Review

Abstract: The Administrative Procedure Act instructs federal courts to invalidate agency decisions that are "arbitrary" or "capricious." In its 1983 decision in the State Farm case, the Supreme Court firmly endorsed the idea that arbitrariness review requires courts to take a "hard look" at agency decisions. The hard look doctrine has been defended as a second-best substitute for insistence on the original constitutional safeguards; close judicial scrutiny is said to discipline agency decisions and to constrain the illegitimate exercise of discretion. In the last two decades, however, hard look review has been challenged on the plausible but admittedly speculative ground that judges' policy preferences affect judicial decisions about whether agency decisions are "arbitrary." This study, based on an extensive data set, finds that the speculation is correct. Democratic appointees are far more likely to vote to invalidate, as arbitrary, conservative agency decisions than liberal agency decisions. Republican appointees are far more likely to invalidate, as arbitrary, liberal agency decisions than conservative agency decisions. Significant panel effects are also observed. Democratic appointees show especially liberal voting patterns on all-Democratic panels; Republican appointees show especially conservative voting patterns on all-Republican panels. Our central findings do not show that judicial votes are dominated by political considerations, but they do raise grave doubts about the claim that hard look review is operating as a neutral safeguard against the errors and biases of federal agencies. Because judicial policy commitments are playing a large role, there is a strong argument for reducing the role of those commitments, and perhaps for softening hard look review.

The Complex Climate Change Incentives of China and the United States

Abstract: It is increasingly clear that the world would be better off with an international agreement to control greenhouse gas emissions. What remains poorly understood is that the likely costs and benefits of emissions controls are highly variable across nations. Most important, prominent projection suggest that the world's leading emitters - the United States and China - have weak incentives to participate in an agreement that would be optimal from the standpoint of the world. The first problem is that any significant emissions effort would probably be exceedingly expensive for both nations. The second problem is that on prominent projections, the United States and China are unlikely to be the most serious losers from climate change. There are two ways to eliminate the resulting obstacle to an international agreement. The first is through altering the perceived cost-benefit analysis for both countries. The second is through an understanding that both nations, and the United States in particular, are under a moral obligation not to inflict serious harm on the highly vulnerable citizens of Africa, India, and elsewhere. Existing proposals for unilateral action on the part of the United States seem to stem from an unruly mixture of confusion, hope, and a sense of moral obligation. There are also interesting differences between the situations of the two leading emitters: Because China is much poorer and has much lower per capita emissions, it is especially difficult to interest China in taking aggressive steps to reduce its emissions.

Willingness to Pay Versus Welfare

Abstract: Economists often analyze questions of law and policy by reference to the criterion of private willingness to pay (WTP), with the belief that people's WTP for a good is an accurate proxy for the welfare that they would obtain from that good. For two reasons, the proxy is crude. The first problem is that people may not pay for all of the benefits they receive, and in such cases, use of WTP may lead in unfortunate directions, even or especially if welfare is our lodestar. Inefficient results may nonetheless increase welfare. The second and more fundamental problem is that people may be willing to pay for goods whose acquisition does not improve their welfare. People typically choose on the basis of their affective forecasting, and their affective forecasts can lead them to make bad blunders. Sometimes people overestimate the welfare effects of both losses and gains. These points have many implications for law and policy. In particular, juries are probably offering greatly inflated dollar awards for hedonic damages, and the outcome of cost-benefit analyses, based on WTP, may not capture welfare, suitably defined. The absence of a connection between increases in Gross Domestic Product and self-reported happiness is highly suggestive here.

Neither Hayek nor Habermas

Abstract: The rise of the blogosphere raises important questions about the elicitation and aggregation of information, and about democracy itself. Do blogs allow people to check information and correct errors? Can we understand the blogosphere as operating as a kind of marketplace for information along Hayekian terms? Or is it a vast public meeting of the kind that Jurgen Habermas describes? In this article, I argue that the blogosphere cannot be understood as a Hayekian means for gathering dispersed knowledge because it lacks any equivalent of the price system. I also argue that forces of polarization characterize the blogosphere as they do other social interactions, making it an unlikely venue for Habermasian deliberation, and perhaps leading to the creation of information cocoons. I conclude by briefly canvassing partial responses to the problem of polarization.

Due Process Traditionalism

Abstract: In many cases, the Supreme Court has limited the scope of "substantive due process" by reference to tradition. Due process traditionalism might be defended in several distinctive ways. The most ambitious defense draws on a set of ideas associated with Edmund Burke and Friedrich Hayek, who suggested that traditions have special credentials by virtue of their acceptance by many minds. But this defense runs into three problems. Those who have participated in a tradition may not have accepted any relevant proposition; they might suffer from a systematic bias; and they might have joined a cascade. An alternative defense sees due process traditionalism as a second-best substitute for two preferable alternatives: a purely procedural approach to the due process clause, and an approach that gives legislatures the benefit of every reasonable doubt. But it is not clear that in these domains, the first-best approaches are especially attractive. Even if they are, the second-best may be an unacceptably crude substitute. The most plausible defense of due process traditionalism operates on rule-consequentialist grounds, with the suggestion that even if traditions are not great, they are often good, and judges do best if they defer to traditions rather than attempting to specify the content of "liberty" on their own. But the rule-consequentialist defense depends on controversial assumptions about the likely goodness of traditions and the institutional incapacities of judges.

On the Divergent American Reactions to Terrorism and Climate Change

Abstract: Two of the most important sources of catastrophic risk are terrorism and climate change. The United States has responded aggressively to the risk of terrorism while doing very little about the risk of climate change. For the United States alone, the cost of the Iraq war is now in excess of the anticipated cost of the Kyoto Protocol. The divergence presents a puzzle; it also raises more general questions about both risk perception and the public demand for legislation. The best explanation for the divergence emphasizes bounded rationality. Americans believe that aggressive steps to reduce the risk of terrorism promise to deliver significant benefits in the near future at acceptable cost. By contrast, they believe that aggressive steps to reduce the risk of climate change will not greatly benefit American citizens in the near future—and they are not willing to pay a great deal to reduce that risk. This intuitive form of cost-benefit analysis is much influenced by behavioral factors, including the availability heuristic, probability neglect, outrage, and myopia. All of these contribute, after 9/11, to a willingness to support significant steps to respond to terrorism and to relative indifference to climate change. It follows that Americans are likely to support such steps in response to climate change only if one of two conditions is met: the costs of those steps can be shown to be acceptably low or new information, perhaps including a salient incident, indicates that Americans have much to gain from risk reduction in the relatively near future. * Karl N. Llewellyn Distinguished Service Professor, Law School and Department of Political Science, University of Chicago. I am grateful to Elizabeth Emens, Jacob Gersen, Robert Hahn, Eric Posner, Richard Posner, and Adrian Vermeule for valuable comments on a previous draft. Thanks to Jennifer Rho for excellent research assistance.

The Law and Economics of Company Stock in 401(k) Plans

Abstract: Some 11 million participants in 401(k) plans invest more than 20 percent of their retirement savings in their employer’s stock. Yet investing in the stock of one’s employer is risky: single securities are riskier than diversified portfolios, and an employee’s human capital typically is positively correlated with the company's performance. In the worst‐case scenario, workers can lose their jobs and much of their retirement wealth simultaneously. For workers who expect to work for a company for many years, a dollar of company stock can be valued at less than 50 cents after accounting for risk. However, employees still invest voluntarily in their employer's stock, and many employers insist on making matching contributions in stock. We provide evidence that employees underestimate the risk of owning company stock, while employers overestimate the benefits associated with employee stock ownership. We then analyze the likely effects of current and proposed regulations in this context.

Of Montreal and Kyoto: A Tale of Two Protocols

Abstract: I am pleased to sign the instrument of ratiacation for the Montreal protocol [governing] substances that deplete the ozone layer. The protocol marks an important milestone for the future quality of the global environment and for the health and well-being of all peoples of the world. Unanimous approval of the protocol by the Senate on March 14the [sic] demonstrated to the world community this country’s willingness to act promptly and decisively in carrying out its commitments to protect the stratospheric ozone layer . . . . —Ronald Reagan

Causation in Tort: General Populations vs. Individual Cases

Abstract: To establish causation, a tort plaintiff must show that it is "more probable than not" that the harm would not have occurred if the defendant had followed the relevant standard of care. Statistical evidence, based on aggregate data, is sometimes introduced to show that the defendant's conduct created a statistically significant increase in the likelihood that the harm would occur. But there is a serious problem with the use of such evidence: It does not establish that in the particular case, the injury was more likely than not to have occurred because the defendant behaved negligently. Under existing doctrine, a plaintiff should not be able to establish liability on the basis of a showing of a statistically significant increase in risk. This point has general implications for the use of statistical evidence in tort cases. It also raises complex issues about the relationship between individual cases and general deterrence: Optimal deterrence might be obtained by imposing liability on defendants who engage in certain behavior, even though a failure to engage in such behavior cannot be connected with the plaintiff's harm by reference to the ordinary standards of causation.

Willingness to Pay versus Welfare

Abstract: Economists often analyze questions of law and policy by reference to the criterion of private willingness to pay (WTP), with the belief that people's WTP for a good is an accurate proxy for the welfare that they would obtain from that good. For two reasons, the proxy is crude. The first problem is that people may not pay for all of the benefits they receive, and in such cases, use of WTP may lead in unfortunate directions, even or especially if welfare is our lodestar. Inefficient results may nonetheless increase welfare. The second and more fundamental problem is that people may be willing to pay for goods whose acquisition does not improve their welfare. People typically choose on the basis of their affective forecasting, and their affective forecasts can lead them to make bad blunders. Sometimes people overestimate the welfare effects of both losses and gains. These points have many implications for law and policy. In particular, juries are probably offering greatly inflated dollar awards for hedonic damages, and the outcome of cost-benefit analyses, based on WTP, may not capture welfare, suitably defined. The absence of a connection between increases in Gross Domestic Product and self-reported happiness is highly suggestive here.

Climate Change Justice

Abstract: Greenhouse gas reductions would cost some nations much more than others, and benefit some nations far less than others. Significant reductions would impose especially large costs on the United States, and recent projections suggest that the United States has relatively less to lose from climate change. In these circumstances, what does justice require the United States to do? Many people believe that the United States is required to reduce its greenhouse gas emissions beyond the point that is justified by its own self-interest, simply because the United States is wealthy, and because the nations most at risk from climate change are poor. This argument from distributive justice is complemented by an argument from corrective justice: The existing "stock" of greenhouse gas emissions owes a great deal to the past actions of the United States, and many people think that the United States should do a great deal to reduce a problem for which it is largely responsible. But there are serious difficulties with both of these arguments. Redistribution from the United States to poor people in poor nations might well be desirable, but if so, expenditures on greenhouse gas reductions are a crude means of producing that redistribution: It would be much better to give cash payments directly to people who are now poor. The argument from corrective justice runs into the standard problems that arise when collectivities, such as nations, are treated as moral agents: Many people who have not acted wrongfully end up being forced to provide a remedy to many people who have not been victimized. The conclusion is that while a suitably designed climate change agreement is in the interest of the world, a widely held view is wrong: Arguments from distributive and corrective justice fail to provide strong justifications for imposing special obligations for greenhouse gas reductions on the United States. These arguments have general implications for thinking about both distributive justice and corrective justice arguments in the context of international law and international agreements.

What Happened on Deliberation Day

Abstract: What are the effects of deliberation about political issues? This essay reports the results of a kind of Deliberation Day, involving sixty-three citizens in Colorado. Groups from Boulder, a predominantly liberal city, met and discussed global warming, affirmative action, and civil unions for same-sex couples; groups from Colorado Springs, a predominately conservative city, met to discuss the same issues. The major effect of deliberation was to make group members more extreme than they were when they started to talk. Liberals became more liberal on all three issues; conservatives became more conservative. As a result, the division between the citizens of Boulder and the citizens of Colorado Springs were significantly increased as a result of intragroup deliberation. Deliberation also increased consensus, and dampened diversity, within the groups. Implications are explored for the uses and structure of deliberation in general.

Backlash's Travels

Abstract: Sometimes the public greatly opposes the decisions of the Supreme Court; sometimes the Court seems to anticipate public backlash and even to respond to it when it occurs. Should a social planner want the Court to anticipate or to respond to backlash? No abstract answer is possible; the appropriate conclusion depends on assumptions about the capacities of courts and the capacities of those who engage in backlash. This point is demonstrated through an exploration of four imaginable worlds: Olympus, the Land of the Ancients, Lochnerland, and Athens. The four worlds reflect radically different assumptions about judicial and public capacities. The proper analysis of backlash depends, in large part, on the prevailing theory of constitutional interpretation, and on whether judges have privileged access to constitutional meaning. If judges lack such access, backlash is a healthy part of dialogue between judges and the public, and the judiciary should sometimes yield. If our world is Olympus, the argument for attention to backlash is severely weakened.

Indignation: Psychology, Politics, Law

Abstract: Moral intuitions operate in much the same way as other intuitions do; what makes the moral domain is distinctive is its foundations in the emotions, beliefs, and response tendencies that define indignation. The intuitive system of cognition, System I, is typically responsible for indignation; the more reflective system, System II, may or may not provide an override. Moral dumbfounding and moral numbness are often a product of moral intuitions that people are unable to justify. An understanding of indignation helps to explain the operation of the many phenomena of interest to law and politics: the outrage heuristic, the centrality of harm, the role of reference states, moral framing, and the act-omission distinction. Because of the operation of indignation, it is extremely difficult for people to achieve coherence in their moral intuitions. Legal and political institutions usually aspire to be deliberative, and to pay close attention to System II; but even in deliberative institutions, System I can make some compelling demands.

Incompletely Theorized Agreements in Constitutional Law

Abstract: How is constitutionalism possible, when people disagree on so many questions about what is good and what is right? This essay, written for a special issue of Social Research on Difficult Decisions, explores the role of two kinds of incompletely theorized agreements amidst sharp disagreements about the largest issues in social life. The first consist of agreements on abstract formulations (freedom of speech, equality under the law); these agreements are crucial to constitution-making as a social practice. The second consist of agreements on particular doctrines and practices; these agreements are crucial to life and law under existing constitutions. Incompletely theorized agreements help illuminate an enduring constitutional puzzle: how members of diverse societies can work together on terms of mutual respect amidst intense disagreements about both the right and the good. Such agreements help make constitutions and constitutional law possible, even within nations whose citizens cannot concur on the most fundamental matters. In many nations, citizens must proceed in the face of conflict and disagreement on the most fundamental matters. The existence of diverse values seems to threaten the very possibility of a constitutional order and social stability. People disagree on rights, on the good life, on equality and liberty, on the nature and the existence of God. How can constitutional decisions be feasible in these circumstances? The problem might seem especially serious for democratic societies, which aspire to self-governance amidst a great deal of heterogeneity. In this essay I deal with two issues—constitution-making and constitutional interpretation—in an effort to make some progress on that question. My basic suggestion is that people can often agree on constitutional practices, and even on constitutional rights, when they cannot agree on constitutional theories. In other words, well-functioning constitutional orders try to solve problems through incompletely theorized agreements. Sometimes these agreements involve abstractions, accepted as such amidst severe disagreements on particular cases. Thus people who disagree on * Karl N. Llewellyn Distinguished Service Professor of Jurisprudence, University of Chicago. I have dealt with aspects of this problem in other places. See Cass R. Sunstein, One Case At A Time (Cambridge: Harvard University Press, 1999); Legal Reasoning and Political Conflict (New York: Oxford University

On the Tension between Sex Equality and Religious Freedom

Abstract: This chapter argues that the Asymmetry Thesis cannot be defended, and that much of the time, sex equality principles are properly applied to religious institutions. It discusses the controversial idea that facially neutral laws may be applied to religious institutions even if they have a severe adverse effect on religious practices. The Asymmetry Thesis is in grave tension with the Donald Smith principle, which would seem to permit application of antidiscrimination laws, facially neutral as they are. The strongest challenge to the principle is that many facially neutral laws do impose substantial burdens on religion; that they lack sufficient liberal justification; and that institutions, including judicial institutions, should not be deemed incapable of drawing the appropriate lines. American law makes the basic prohibitions on employment discrimination inapplicable where religion, sex, or national origin is "a bona fide occupational qualification reasonably necessary to the normal operation of that particular business or enterprise".

Group Polarization and 12 Angry Men

Abstract: Deliberating groups, including juries, typically end up in a more extreme position in line with their predeliberation tendencies. A jury whose members are inclined, before deliberation, to find a defendant not guilty will likely render a verdict of not guilty; a jury whose members want to award punitive damages will likely produce an award higher than that of the median juror. The phenomenon of group polarization, found in many domains, stems from a combination of information pooling and peer pressure. The events portrayed in the film 12 Angry Men seem to defy the logic of group polarization, but the film nonetheless shows an acute psychological sense.

Climate Change and Animals

Abstract: Climate change is already having adverse effects on animal life, and those effects are likely to prove devastating in the future. Nonetheless, the relevant harms to animals have yet to become a serious part of the analysis of climate change policy. Even if animals and species are valued solely by reference to human preferences, inclusion of their welfare dramatically increases the argument for aggressive responses to climate change. We estimate that, even under conservative assumptions about valuation, losses to nonhuman life might run into the hundreds of billions of dollars annually. Whatever the precise figure, the general conclusion is clear: An appreciation of the likely loss of animal life leads to a massive increase in the assessment of the overall damage and cost of climate change.

If People Would Be Outraged by Their Rulings, Should Judges Care?

Abstract: At first glance, it is puzzling to suggest that courts should care whether the public would be outraged by their decisions; judicial anticipation of public outrage and its effects seems incompatible with judicial independence. Nonetheless, judges might be affected by the prospect of outrage for both consequentialist and epistemic reasons. If a judicial ruling would undermine the cause it is meant to promote or impose serious social harms, judges have reason to hesitate on consequentialist grounds. The prospect of public outrage might also suggest that the Court’s ruling would be incorrect on the merits; if most people disagree with the Court’s decision, perhaps the Court is wrong. Those who adopt a method on consequentialist grounds are more likely to want to consider outrage than are those who adopt an interpretive method on nonconsequentialist grounds (including some originalists). The epistemic argument for attention to outrage is greatly weakened if people suffer from a systematic bias or if the public view is a product of an informational, moral, or legal cascade. There is also a strong argument for banning consideration of the effects of public outrage on ruleconsequentialist grounds. Judges might be poorly suited to make the relevant inquiries, and consideration of outrage might produce undue timidity. These points have general implications for those who favor “popular constitutionalism,” or judicial restraint, on democratic grounds. An understanding of the consequentialist and epistemic grounds for judicial attention to public outrage also offers lessons for the decisions of other public officials, including presidents, governors, and mayors, who might be inclined to make decisions that will produce public outrage.

Willingness to Pay vs. Welfare

Abstract: Consider the following cases: 1. Jones, who is wealthy, is willing to pay $1,000 and no more for a new television set. Jones would enjoy a new television set, but he already has a good television set, and he would not, in fact, gain a great deal from a new one. But because he is so wealthy, he would be better off with the television set than with $1,000. 2. Smith, who is poor, is willing to pay $75 and no more for a new television set. Smith would greatly enjoy a new television set; he does not now have one. He would be better off with the television set than with $75. But because he is poor, he would be worse off with the television set at a price in excess of $75. 3. Jenkins, who is poor and disabled, is willing to pay $20 and no more for a workplace accommodation that will enable her to work. The cost of the accommodation to her employer is $150. If the accommodation is made, Jenkins will gain far more in terms of welfare than the employer (and its customers) will lose. 4. Wilson, who is a very wealthy New Yorker, would be willing to pay $1,000,000 for a summer home in Aspen, Colorado. It turns out that if Wilson bought that summer home, she would not much enjoy it, and in the long run she would not use it. She would miss her friends and her life in New York. In the end, she would be better off with $1,000,000 than with the summer home in Aspen. 5. Andrews, who is poor, is not willing to pay $600 for a health insurance plan. It turns out that if Andrews bought that health insurance plan, her life would be much better; she would be far healthier and her chronic back problem would be greatly improved. For her, the loss of $600 would be much smaller than the gain, in terms of welfare, from purchase of the health insurance plan. In all of these tales, there seems to be a disjunction between how much people are willing to pay for a certain good and how much welfare they would obtain from receiving that good. This disjunction might well seem odd, because economically oriented law professors (and many policymakers) often work with the idea of “willingness to pay” (WTP). Their goal

The Catastrophic Harm Precautionary Principle

Abstract: When catastrophic outcomes are possible, it makes sense to take precautions against the worst-case scenarios — the Catastrophic Harm Precautionary Principle. This principle is based on three foundations: an emphasis on people’s occasional failure to appreciate the expected value of truly catastrophic losses; a recognition that political actors may engage in unjustifiable delay when the costs of precautions would be incurred immediately and when the benefits would not be enjoyed until the distant future; and an understanding of the distinction between risk and uncertainty. The normative arguments are illustrated throughout with reference to the problem of climate change; other applications include avian flu, genetic modification of food, protection of endangered species, and terrorism.

Statement on Prediction Markets

Abstract: Prediction markets are markets for contracts that yield payments based on the outcome of an uncertain future event, such as a presidential election. Using these markets as forecasting tools could substantially improve decision making in the private and public sectors. We argue that U.S. regulators should lower barriers to the creation and design of prediction markets by creating a safe harbor for certain types of small stakes markets. We believe our proposed change has the potential to stimulate innovation in the design and use of prediction markets throughout the economy, and in the process to provide information that will benefit the private sector and government alike.