What behavioral studies can teach jurists about possession and vice versa

Introduction For nearly five decades, the economic analysis of property law has occupied a central place in the property literature. After laying down the main economic justifications for private property (for summaries see Posner 2011: 40–42; Shavell 2004: 11–23), and deriving basic rules – such as those relating to takings compensation – from these ideas (e.g., Michelman 1967), scholars have turned to ever more sophisticated and complex analyses that are sometimes less applicable to actual property conflicts (Lewinsohn-Zamir 2001: 98–101). In contrast, the behavioral analysis of property law is still relatively novel. Research in this field is in the early stage of testing or applying basic insights and theories, and it currently covers rather limited or sporadic issues. The behavioral property literature can be divided into two categories, which partially correspond with two different periods. One category consists of (mostly earlier) studies that did not conduct independent, law-related experimental research, but rather relied on general results from the vast corpus of psychological literature. These applications were based on common-sense reasoning and analogies, rather than on direct testing of property law topics. Thus, Fennell (2003) used phenomena like the omission and regret-avoidance biases (Baron and Ritov 1994; Ritov and Baron 1990, 1992), to explain why, despite the popular opposition to estate taxes, people do not dispose of their property during their lifetime. The second category of behavioral studies is characterized by endeavors to carry out experimental research explicitly tailored to legal issues. Scholars have either designed their own experiments or relied on studies that directly examined law-related topics. Thus, for example, Nadler and Diamond (2008) investigated the adequacy of market-value compensation for the expropriation of residences, by expressly asking subjects about the sum of money above market value that would be required for them to sell their home (with the understanding that if negotiations fail, the government would exercise its eminent domain powers to compel the transfer).