Thaler and colleagues sought to bring insights from behavioral economics to the analysis of legal rules and regulations.

This behavioral law and economics approach contrasts with traditional law and economics, which relies heavily on rational choice theory. For instance, behavioral research shows the Coase theorem may fail due to endowment effects and fairness concerns, even with low transaction costs.

Likewise, behavioral findings on limited self-control, overconfidence, and impatience suggest regulations like mandatory retirement savings or consumer protection may sometimes be justified, challenging libertarian anti-paternalism dogma.

Behavioral law and economics aims to make legal analysis more realistic and empirically-grounded. But it remains controversial, especially the paternalism debate. Nonetheless, it has grown rapidly and influenced numerous legal domains, from contracts to criminal justice to corporate governance.

Section: 6, Chapter: 27

Author: Richard Thaler

For tyranny to take hold, professionals must ignore or abandon their ethical codes and simply follow the orders of the regime. This was crucial in Nazi Germany, where lawyers provided cover for illegal orders, doctors participated in grotesque experiments, businessmen exploited slave labor, and civil servants enabled genocidal policies. If key professions had simply adhered to basic ethics around human rights and human dignity, the Nazi machine would have had a much harder time implementing its agenda. Professionals must consult their conscience and be guided by ethics even, and especially, when a regime claims the situation is an exception.

Section: 1, Chapter: 5

Author: Timothy Snyder

In the 1990s, crime fell precipitously across the United States. Violent crime plummeted 18% in the span of just three years from 1993-1996. This caught many experts by surprise, as the prevailing forecast at the time had been for a coming crime wave fueled by the crack epidemic and a rise of "superpredator" juvenile offenders.

So what explains the unexpected crime drop? The authors argue it was not the commonly cited reasons like innovative policing, stricter gun control, a stronger economy, or more use of capital punishment. While those may have played a role, the data suggests the real answer is a surprising one - the legalization of abortion 20 years prior, following Roe v. Wade. According to the authors, this was the hidden factor that quietly removed a large cohort of would-be violent criminals from the population.

Section: 1, Chapter: 4

Author: Steven D. Levitt, Stephen J. Dubner

For the law to be effective, it must be seen as legitimate by the population. Legitimacy has three components:

1. People must feel they have a voice, and that if they speak up, they will be heard.
2. The law must be predictable. There has to be a reasonable expectation that the rules tomorrow are going to be roughly the same as the rules today.
3. The authority has to be fair. It can't treat one group differently from another.

When the British were seen as violating these principles in Northern Ireland, it created an opening for the IRA to position themselves as the legitimate authority in Catholic areas. Authority isn't just about power - it's about getting people to want to submit to your power. Establishing legitimacy is a precondition for authority to function.

Section: 3, Chapter: 7

Author: Malcolm Gladwell