The standard rationality concept ‘strict rationality’ from neoclassical economics presupposes that humans are utility maximisers, that they have stable preferences and full information of all available alternatives, and that they have unlimited computational power. The reality is not so. People change their mind all the time, they have limited knowledge, and computational power is a scarce resource. In other words, they are bounded rational. If regulation and other initiatives are based on strict rationality, the purpose of the introduced measures is not likely to be fulfilled.
The article explores how insights from behavioural economic can benefit business law, in particular company and capital market law. In doing so, the article accounts for the systematic deviations from the standard model that characterise bounded rationality and what the consequences of this are for future regulation. Also, the article addresses the different purposes pursued using behavioural insights and the means to do so as well as the criticism that behavioural insights have faced. The article discusses various ways to ‘debias’ or ‘boost’ cognitive competences, and finishes by suggesting a potential behavioural strategy for Danish business law.
The article explores how insights from behavioural economic can benefit business law, in particular company and capital market law. In doing so, the article accounts for the systematic deviations from the standard model that characterise bounded rationality and what the consequences of this are for future regulation. Also, the article addresses the different purposes pursued using behavioural insights and the means to do so as well as the criticism that behavioural insights have faced. The article discusses various ways to ‘debias’ or ‘boost’ cognitive competences, and finishes by suggesting a potential behavioural strategy for Danish business law.
The purely economic man is indeed close to being a social moron. Economic theory has been preoccupied with this rational fool.
Richard H. Thaler, Misbehaving
1. Introduktion
Den neoklassiske økonomis arketype ‘homo economicus’, der besidder fuldkommen rationalitet (strict rationality 1 ...