Behavioral Economics and Free Market Solutions: The Case of Airline Security

Abstract

In most of the legal literature, how descriptive questions are answered often determine what normative suggestions an author makes. Rational choice theories are usually associated with free market policy recommendations, while partisans of the behavioral law and economics approach tend to advocate more paternalistic measures. This Article turns this traditional framework on its head, arguing that occasionally a behaviorist orientation can recommend the adoption of laissez-faire policies. The issue of airline security is used to demonstrate the point. People overestimate the risks of flying and terrorism, and empirical works suggests that government has gone too far in trying to protect consumers from themselves. This paper suggests that airline security be privatized or at least heavily deregulated, and invites further research into non-paternalistic implications of behavioral law and economics.