Mathematics, Psychology, and Law: The Legal Ramifications of the Exponential Growth Bias

This lecture is part of Prof. Schäfer's lecture series "New Frontiers in Law and Economics".

Psychologists have long demonstrated that people strongly and systematically underestimate exponential growth. This phenomenon—which has largely escaped the attention of behavioral economists and jurists—may adversely affect decision-making by both the law’s addressees and lawmakers. Key examples include borrower’s insufficient regard to compound interest; savers’ underestimation of the impact of the fees they pay on the accumulation of wealth for retirement; pyramid schemes; and failed governmental handling of pandemics and global warming.

Lecturer: Prof. Eyal Zamir, Professor of Law, Hebrew University of Jerusalem

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