Prediction and postdiction, pollution, and Cass Sunstein
In 2008, the Michigan Law Review published an article titled Uncertainty revisited: legal prediction and legal postdiction [Vol. 108, page 467, which article also appears on SSRN].
The abstract notes:
Legal scholarship, following rational-choice theory, has traditionally treated uncertainty as a single category. A large body of experimental studies, however, has established that individuals treat guesses concerning the future differently than guesses concerning the past. Even where objective probabilities and payoffs are identical individuals are much more willing to predict a future event (and are more confident in the accuracy of their predictions) than they are willing to postdict a past event (and are also less confident in the accuracy of their postdiction). For example, individuals are more willing to bet on the results of a future die toss than they are willing to bet on the results of a past toss.
In Wikipedia, one finds postdiction in the following context:
According to critics of paranormal beliefs, postdiction (or post-shadowing, retroactive clairvoyance, or prediction after the fact) is an effect of hindsight bias that explains claimed predictions of significant events, such as plane crashes and natural disasters. In religious contexts it is frequently referred to by the Latin term vaticinium ex eventu, or foretelling after the event. Through this term, critics claim that many biblical prophecies (and similar prophecies in other religions) that may appear to have come true were in fact written after the events supposedly predicted, or that their text or interpretation were modified after the event to fit the facts as they occurred.
The conclusion of the law review article was
The preceding analysis shows that legislators, law-enforcement authorities, and judges can often choose the nature of legal uncertainties. Most importantly, their decisions regarding the specificity of norms, law-enforcement strategies, and the parameters that set sanction severity determine whether legal contingencies would be placed in the future or in the past. The different effects of past and future uncertainty on behavior thus suggest that the legal system can influence choices not only by providing positive and negative payoffs in the form of formal penalties and subsidies; it may also inhibit and encourage behavior by manipulating the nature of law-related uncertainties. Furthermore, the prevalence of uncertainty across different legal contexts allows policymakers to select from a spectrum of possibilities and combinations. Policymakers may regulate an activity in a way that involves future, past, or some combination of past and future contingencies. This rich set of alterna-tives shows the potential wide-range implications of prediction-postdiction findings in the context of legal regulation.
***
In terms of analysis, the law review authors pointed to rules as to drunk-driving vs. rules for leafleting (Hill v. Colorado):
In the contexts of drunk driving and constitutional liberties, the behavioral literature suggests that the reluctance to postdict favors the use of one type of norm over another. In the case of drunk driving, it shows that the use of complex rules rather than standards canserve to increase deterrence. In the case of constitutional liberties, it establishes that complex rules are likely to generate chilling effects that are greater than those that result from standards. Sometimes, however, the normative implications of the reluctance to postdict are unclear.
In context, "reluctance to postdict" means uncertainty at the TIME of the event (e.g., the drunk does not know his exact blood alcohol while driving; the leafletter does not know exactly "how far" he/she is from the building). This has nothing to do with an after-the-fact PREDICTION. A better example would be patent claim construction. At the time of infringement, an accused infringer might reasonably believe a claim means one thing, but a court, construing the claim at a later date, might say something else. An ability to postdict might be relevant here.
The law review gets into pollution issues:
Consider, for example, the regulation of potentially polluting activities. From a social perspective, such activities should be encouraged where their benefits outweigh their costs and prevented when their net return is negative. A regulator can deter undesirable polluting activity by applying a general standard such as prohibiting (or imposing liability for) "unreasonable" or "unnecessary" pollution. Alternatively, the regulator can develop a set of rules governing pollution and impose criminal or civil liability for violating these rules. The empirical findings suggest that the rule-governed regulation has greater deterrent effect than standards-governed regulation because rule-governed activity requires individuals to postdict. (110) A rule-governed scheme (particularly a complex one) would be more effective in discouraging individuals from polluting than a standards-governed scheme, both in cases in which the activity that generates the pollution is socially desirable and in cases in which it is undesirable. In contrast, a standards-like scheme is less likely to impede cost-effective activities but also less likely to prevent cases of "inefficient" pollution. In other words, rule-governed activity is more likely to deter undesirable behavior but is also more likely to overdeter desirable activity, while standards-governed activity is less likely to deter desirable activity but may also under-deter undesirable activity. The choice between a rule-governed scheme and a standards-governed scheme therefore has both costs and benefits, and those should be weighted carefully against each other.
One notes that a rules-approach gives the potential polluter exact knowledge of what constitutes pollution at the time of the event. Unlike the drunk driver, who most likely doesn't measure his blood alcohol, the potential polluter can measure his NOx and SOx. There is no postdiction issue. The issue is setting the right numbers in the rules, most likely with an eye to cost/benefit (recall Learned Hand).
***Of cost/benefit-->
Footnote 84 of the law review cited to Cass Sunstein: The two most comprehensive law and economics analyses of rules and standards are Isaac Ehrlich & Richard A. Posner, An Economic Analysis of Legal Rulemaking, 3 J. LEGAL STUD. 257 (1974), and Kaplow,supra note 81. For additional applications of economic analysis to rules and standards, see Colin S. Diver, The Optimal Precision of Administrative Rules, 93 YALE L.J. 65 (1983); Hadfield, supra note 1; Kaplow, supra note 82; Schlag, supra note 81; and Cass R. Sunstein, Problems with Rules, 83 CAL. L. REV. 953 (1995).
The footnote related to the text:
The use of rules and standards, as law and economics scholars have shown, involves different costs and benefits. (84) The cost of producing standards is typically lower, but standards usually entail higher enforcement and compliance costs than rules. (85) Formulating a standard "to take reasonable care in all matters" would be extremely easy and nearly costless. Yet applying this standard would generate significant costs for both judges, who would have to determine whether the defendants have complied with the standard or not (enforcement costs), and potential defendants, who have to determine what level of care is necessary to escape liability (compliance costs). (86)
And separately as to Cass Sunstein in his new job:
Jerome Maynard, a member at Dykema, expects aggressive action to modify or reverse Bush-era pollution policies--but with a caveat. He points out that Obama has appointed Harvard Law School Professor Cass Sunstein to head the Office of Information and Regulatory Affairs, the gatekeeper for proposed government rules, including environmental rules. Sunstein is known as an adamant proponent of tying regulation to cost-benefit analysis.
"While many environmentalists argue cost should not be a factor, this [appointment of Sunstein] is a clear signal that there will be a role for cost-benefit analysis [in air pollution regulation]," Maynard says. [from Inside Counsel, April 2009]
The abstract notes:
Legal scholarship, following rational-choice theory, has traditionally treated uncertainty as a single category. A large body of experimental studies, however, has established that individuals treat guesses concerning the future differently than guesses concerning the past. Even where objective probabilities and payoffs are identical individuals are much more willing to predict a future event (and are more confident in the accuracy of their predictions) than they are willing to postdict a past event (and are also less confident in the accuracy of their postdiction). For example, individuals are more willing to bet on the results of a future die toss than they are willing to bet on the results of a past toss.
In Wikipedia, one finds postdiction in the following context:
According to critics of paranormal beliefs, postdiction (or post-shadowing, retroactive clairvoyance, or prediction after the fact) is an effect of hindsight bias that explains claimed predictions of significant events, such as plane crashes and natural disasters. In religious contexts it is frequently referred to by the Latin term vaticinium ex eventu, or foretelling after the event. Through this term, critics claim that many biblical prophecies (and similar prophecies in other religions) that may appear to have come true were in fact written after the events supposedly predicted, or that their text or interpretation were modified after the event to fit the facts as they occurred.
The conclusion of the law review article was
The preceding analysis shows that legislators, law-enforcement authorities, and judges can often choose the nature of legal uncertainties. Most importantly, their decisions regarding the specificity of norms, law-enforcement strategies, and the parameters that set sanction severity determine whether legal contingencies would be placed in the future or in the past. The different effects of past and future uncertainty on behavior thus suggest that the legal system can influence choices not only by providing positive and negative payoffs in the form of formal penalties and subsidies; it may also inhibit and encourage behavior by manipulating the nature of law-related uncertainties. Furthermore, the prevalence of uncertainty across different legal contexts allows policymakers to select from a spectrum of possibilities and combinations. Policymakers may regulate an activity in a way that involves future, past, or some combination of past and future contingencies. This rich set of alterna-tives shows the potential wide-range implications of prediction-postdiction findings in the context of legal regulation.
***
In terms of analysis, the law review authors pointed to rules as to drunk-driving vs. rules for leafleting (Hill v. Colorado):
In the contexts of drunk driving and constitutional liberties, the behavioral literature suggests that the reluctance to postdict favors the use of one type of norm over another. In the case of drunk driving, it shows that the use of complex rules rather than standards canserve to increase deterrence. In the case of constitutional liberties, it establishes that complex rules are likely to generate chilling effects that are greater than those that result from standards. Sometimes, however, the normative implications of the reluctance to postdict are unclear.
In context, "reluctance to postdict" means uncertainty at the TIME of the event (e.g., the drunk does not know his exact blood alcohol while driving; the leafletter does not know exactly "how far" he/she is from the building). This has nothing to do with an after-the-fact PREDICTION. A better example would be patent claim construction. At the time of infringement, an accused infringer might reasonably believe a claim means one thing, but a court, construing the claim at a later date, might say something else. An ability to postdict might be relevant here.
The law review gets into pollution issues:
Consider, for example, the regulation of potentially polluting activities. From a social perspective, such activities should be encouraged where their benefits outweigh their costs and prevented when their net return is negative. A regulator can deter undesirable polluting activity by applying a general standard such as prohibiting (or imposing liability for) "unreasonable" or "unnecessary" pollution. Alternatively, the regulator can develop a set of rules governing pollution and impose criminal or civil liability for violating these rules. The empirical findings suggest that the rule-governed regulation has greater deterrent effect than standards-governed regulation because rule-governed activity requires individuals to postdict. (110) A rule-governed scheme (particularly a complex one) would be more effective in discouraging individuals from polluting than a standards-governed scheme, both in cases in which the activity that generates the pollution is socially desirable and in cases in which it is undesirable. In contrast, a standards-like scheme is less likely to impede cost-effective activities but also less likely to prevent cases of "inefficient" pollution. In other words, rule-governed activity is more likely to deter undesirable behavior but is also more likely to overdeter desirable activity, while standards-governed activity is less likely to deter desirable activity but may also under-deter undesirable activity. The choice between a rule-governed scheme and a standards-governed scheme therefore has both costs and benefits, and those should be weighted carefully against each other.
One notes that a rules-approach gives the potential polluter exact knowledge of what constitutes pollution at the time of the event. Unlike the drunk driver, who most likely doesn't measure his blood alcohol, the potential polluter can measure his NOx and SOx. There is no postdiction issue. The issue is setting the right numbers in the rules, most likely with an eye to cost/benefit (recall Learned Hand).
***Of cost/benefit-->
Footnote 84 of the law review cited to Cass Sunstein: The two most comprehensive law and economics analyses of rules and standards are Isaac Ehrlich & Richard A. Posner, An Economic Analysis of Legal Rulemaking, 3 J. LEGAL STUD. 257 (1974), and Kaplow,supra note 81. For additional applications of economic analysis to rules and standards, see Colin S. Diver, The Optimal Precision of Administrative Rules, 93 YALE L.J. 65 (1983); Hadfield, supra note 1; Kaplow, supra note 82; Schlag, supra note 81; and Cass R. Sunstein, Problems with Rules, 83 CAL. L. REV. 953 (1995).
The footnote related to the text:
The use of rules and standards, as law and economics scholars have shown, involves different costs and benefits. (84) The cost of producing standards is typically lower, but standards usually entail higher enforcement and compliance costs than rules. (85) Formulating a standard "to take reasonable care in all matters" would be extremely easy and nearly costless. Yet applying this standard would generate significant costs for both judges, who would have to determine whether the defendants have complied with the standard or not (enforcement costs), and potential defendants, who have to determine what level of care is necessary to escape liability (compliance costs). (86)
And separately as to Cass Sunstein in his new job:
Jerome Maynard, a member at Dykema, expects aggressive action to modify or reverse Bush-era pollution policies--but with a caveat. He points out that Obama has appointed Harvard Law School Professor Cass Sunstein to head the Office of Information and Regulatory Affairs, the gatekeeper for proposed government rules, including environmental rules. Sunstein is known as an adamant proponent of tying regulation to cost-benefit analysis.
"While many environmentalists argue cost should not be a factor, this [appointment of Sunstein] is a clear signal that there will be a role for cost-benefit analysis [in air pollution regulation]," Maynard says. [from Inside Counsel, April 2009]
posted by Lawrence B. Ebert at 8:41 AM
0 Comments:
Post a Comment
<< Home