This course provides a comprehensive overview of strategic decision making in the legal setting. It provides training in decision analysis as well as a theoretical examination of the relevant aspects of game theory, contracting theory and behavioural decision theory. The emphasis is on the aspects of decision-making relevant in the legal context. Theoretical issues covered in the course include notions of uncertainty and risk, basics of prospect theory, selected topics from game theory, including the prisoner dilemma, social dilemma and other common cooperative and non-cooperative games, moral hazard and Akerlof’s adverse selection problem, as well as descriptive lessons from behavioural decision science, including bounded rationality and judgmental heuristics, anchoring, judgmental overconfidence, framing, and instances of bounded awareness in strategic settings such as irrational escalation of commitment, overbidding and the winner’s curse. In addition to the theory, the students will be taught applied decision analysis, a formal analytical framework for decisions under uncertainty, commonly used by major corporations in capital investments and increasingly employed by law firms when advising clients.
Strategic Decision-Making for Lawyers
3 ECTS / 18h / English