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@article{192280,
        author = {Divyansh Singh Chauhan and Dr. Arvind Kumar Singh},
        title = {BEHAVIORAL LAW AND ECONOMICS: DESIGNING LAWS ALIGNED WITH REAL HUMAN BEHAVIOR},
        journal = {International Journal of Innovative Research in Technology},
        year = {2026},
        volume = {12},
        number = {9},
        pages = {840-849},
        issn = {2349-6002},
        url = {https://ijirt.org/article?manuscript=192280},
        abstract = {Behavioral Law and Economics (BLE) merges insights from psychology and economics to craft legal rules that reflect how people actually behave, rather than assuming perfect rationality. Traditional law and economics relies on "homo economicus," a model of utility-maximizing individuals, but real humans exhibit biases like loss aversion, framing effects, overoptimism, and bounded rationality, leading to predictable deviations from ideal choices. BLE addresses this by using empirical evidence to design policies that nudge better outcomes while preserving welfare and liberty, such as default opt-out rules for retirement savings or simplified disclosures in consumer contracts.
This approach improves social welfare by aligning laws with actual behavior. For instance, "libertarian paternalism"—coined by Cass Sunstein and Richard Thaler—structures choices to counter biases without restricting options, like automatic enrollment in 401(k) plans that boosts savings rates. Critics argue it risks overreach by central planners assuming they know individuals' "true" preferences better than revealed choices, yet proponents emphasize debiasing through law, such as mandatory cooling-off periods for high-stakes decisions prone to impulsivity. Applications span consumer protection (e.g., CFPB regulations), antitrust enforcement, and environmental policy, where sin taxes or default green energy options exploit time-inconsistent preferences.},
        keywords = {Bounded Rationality, Libertarian Paternalism, Nudge Theory, Debiasing, Cognitive Biases},
        month = {February},
        }