What does the law mean to ordinary people? Such a broad question can be answered in several ways, depending on the point of view, disciplinary training, etc. From the point of view of economic analysis, a single actor would consider the law as a system of incentives. In this perspective, incentives provide or even constitute reasons to act. Attention, therefore, shifts from isolated incentives to the mechanism that generates such incentive-sensitive behaviour. In the ancient neoclassic economic account, people reply to incentives with a motivation to maximize their expected utility conjointly referred to as rational preferences. The economic analysis of law subscribes to the postulate of rationality, therefore, treats law as a kind of price system.
This research addresses important ways in which actual behaviour differs from the behaviour predicted by the traditional rationality-based model.
However, since economics still lacks a general theoretical explanation that can replace the workhorse of rational preference, the legal applications of behavioural economics, at least at the general level, are more specific than general: What does the law mean for the ordinary citizen? Law means justice, morality, reason, order, and fairness from the point of view of society. The law designates the statutes, acts, rules, regulations, ordinances, and ordinances from the point of view of the legislator. This article certainly makes a bold attempt to paint an analytical framework to answer this question. Instead of examining the legal implications of bounded rationality - a very laudable exercise in itself - this article proposes a theory of extended rationality. The main idea of this theory is to expand the concept of personal utility in such a way that it encompasses personal values. This theory could be useful for economics in general, but it could be particularly useful for developing legal and economic accounts of legal issues that have been constrained by the traditional model of rationality.
Defined as desirable values, the guide on your individuals selects actions, assesses people and events, and explains or justifies their actions and evaluations