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Research on law and economics

Economics is a science about human behavior, and incentives are at the very heart of it. An incentive is any factor that motivates a particular action, or counts as a reason for preferring one choice to the alternatives.

In the standard economic approach to incentives, humans are motivated by money alone, and incentive contracts are perfectly enforced by legal courts.

This approach has turned out to be very fruitful as it helps us formulate precise hypotheses about optimal incentives in various situations.

But in the last decades the profession has also gained insights from law, political science, sociology and psychology and learned that people's preferences, and the institutions that surrounds them, are more complicated and less well-defined than what the simplest models of homo economicus prescribe.

Researchers at UiS Business School investigate the provision and effect of incentives in situations where humans are motivated by more than money and legal institutions are imperfect.

The researchers study:

  • Incentive provision and performance pay systems within and between firms
  • Incentives to exert effort, incentives to take risk, incentives to allocate attention between different projects and incentives to commit crime.
  • The interaction between non-monetary and monetary incentives and to what extent social preferences affect behaviour of individuals and firms
  • How new regulations, legal reforms or new tax regimes incentivize firms or individuals to take actions that either reduce or improve social welfare
Stock market

MOTIVATION: Is it all about the money?