Coordinating in the Shadow of the Law: Two Contextualized Tests of the Focal Point Theory of Legal Compliance

In situations where people have an incentive to coordinate their behavior, law can provide a framework for understanding and predicting what others are likely to do. According to the focal point theory of legal compliance, the law's articulation of a behavior can sometimes create self-fulfilling expectations that it will occur. Existing theories of legal compliance emphasize the effect of sanctions or legitimacy; we argue that, in addition to sanctions and legitimacy, law can also influence compliance simply by making one outcome salient. We tested this claim in two experiments where sanctions and legitimacy were held constant. Experiment 1 demonstrated that a mandatory legal rule operating in a property dispute influenced compliance only when there was an element of coordination. Experiment 2 demonstrated that a default rule in a contract negotiation acted as a focal point for coordinating negotiation decisions. Both experiments confirm that legal rules can create a focal point around which people tend to coordinate.

[1]  Russell B. Korobkin,et al.  The Status Quo Bias and Contract Default Rules , 1998 .

[2]  Roy B. Flemming,et al.  Ordinary Litigation in America's Civil Courts: Images of Lawyers and Bargaining@@@The Justice Broker: Lawyers and Ordinary Litigation@@@Let's Make a Deal: Understanding the Negotiation Process in Ordinary Litigation , 1991 .

[3]  Eric A. Posner,et al.  Which States Have the Best (and Worst) High Courts? , 2008 .

[4]  Barry R. Weingast,et al.  7. Ideas, Interests, and Institutions: Constructing the European Community’s Internal Market , 2019 .

[5]  J A Richmond,et al.  Documenting discrimination. , 1990, Journal of the American Medical Women's Association.

[6]  Andrei Shleifer,et al.  Private Enforcement of Public Laws: A Theory of Legal Reform , 1998 .

[7]  Russell B. Korobkin,et al.  Inertia and Preference in Contract Negotiation: The Psychological Power of Default Rules and Form Terms , 1998 .

[8]  Sally Engle Merry,et al.  Urban Danger: Life in a Neighborhood of Strangers , 1981 .

[9]  Kristina Murphy,et al.  Regulating More Effectively: The Relationship between Procedural Justice, Legitimacy, and Tax Non-Compliance , 2005 .

[10]  Richard H. McAdams,et al.  The Expressive Power of Adjudication , 2005 .

[11]  Stewart Macaulay.  Non-contractual relations in business: a preliminary study , 1963 .

[12]  R. Mnookin.  Bargaining in the shadow of the law : the case of devorce , 1979 .

[13]  H. Erlanger,et al.  Participation and Flexibility in Informal Processes: Cautions from the Divorce Context , 1987 .

[14]  Eric A. Posner,et al.  Which States Enter into Treaties, and Why? , 2008 .

[15]  A. Beales,et al.  Prayer in the Public Schools: Law and Attitude Change , 1968 .

[16]  Stewart Macaulay,et al.  Non-Contractual Relations in Business , 2009 .

[17]  T. Tyler,et al.  Building a Law-Abiding Society: Taking Public Views About Morality and the Legitimacy of Legal Authorities into Account When Formulating Substantive Law , 2000 .

[18]  M. Grossberg.  A Judgment for Solomon: Bargaining in the Shadow of the Law , 1996 .

[19]  T. Miles,et al.  Judicial Ideology and the Transformation of Voting Rights Jurisprudence , 2008 .

[20]  Richard H. McAdams,et al.  The Condorcet Jury Theorem and the Expressive Function of Law: A Theory of Informative Law , 2003 .

[21]  R. Epstein,et al.  Introduction to 'The Going Private Phenomenon: Causes and Implications' , 2008 .

[22]  Ariel Porat,et al.  Liability for Lapses: First or Second Order Negligence? , 2008 .

[23]  Harold G. Grasmick,et al.  Legal punishment, social disapproval and internalization as inhibitors of illegal behavior. , 1980 .

[24]  Eric A. Posner,et al.  Law and Social Norms , 2002 .

[25]  Paul J. Heald.  Optimal Remedies for Patent Infringement: A Transactional Model , 2008 .

[26]  J. Gibson.  The Legitimacy of the U.S. Supreme Court in a Polarized Polity , 2007 .

[27]  John Seely,et al.  Law in Everyday Life , 2003 .

[28]  Richard A. Epstein.  The Disintegration of Intellectual Property , 2008 .

[29]  R. Sugden,et al.  The Nature of Salience: An Experimental Investigation of Pure Coordination Games , 1994 .

[30]  William A. Birdthistle,et al.  One Hat Too Many-Investment Desegregation in Private Equity , 2009 .

[31]  Prayer in the Public Schools: Law and Attitude Change. , 1968 .

[32]  C. Sunstein,et al.  Four Failures of Deliberating Groups , 2008 .

[33]  Jeffrey J. Rachlinski,et al.  Remedies and the Psychology of Ownership , 1998 .

[34]  Randal C. Picker.  Competition and Privacy in Web 2.0 and the Cloud , 2008 .

[35]  Kitty Calavita,et al.  Blue jeans, rape, and the de-constitutive power of law , 2001 .

[36]  Gregory A. Caldeira,et al.  The Eti-ology of Public Support for the Supreme Court , 1992 .

[37]  Jordi Brandts,et al.  Equilibrium Selection in Experimental Games with Recommended Play , 1995 .

[38]  Richard H. McAdams,et al.  Adjudicating in Anarchy: An Expressive Theory of International Dispute Resolution , 2004 .

[39]  P. Hammond,et al.  The school prayer decisions from court policy to local practice , 1974 .

[40]  Omri Ben-Shahar.  How to Repair Unconscionable Contracts , 2008 .

[41]  David A. Strauss,et al.  Common Law Constitutional Interpretation , 1996 .

[42]  L. Friedman.  Coming of Age: Law and Society Enters an Exclusive Club , 2005 .

[43]  L. Coser,et al.  The Civil Rights Society: The Social Construction of Victims , 1988 .

[44]  Howard S. Erlanger,et al.  Internal Dispute Resolution: The Transformation of Civil Rights in the Workplace , 1993 .

[45]  T. Schelling.  The Strategy of Conflict , 1963 .

[46]  Lewis A. Kornhauser,et al.  Bargaining in the Shadow of the Law: The Case of Divorce , 1979, Discussions in Dispute Resolution.

[47]  R. Sugden.  The Economics of Rights, Co-Operation, and Welfare , 1986 .

[48]  J. Nash,et al.  The Uneasy Case for Transjurisdictional Adjudication , 2008 .

[49]  I. Holloway.  The Hollow Hope: Can Courts Bring About Social Change? , 1992 .

[50]  Bernard E. Harcourt,et al.  Abolition in the U.S.A. by 2050: On Political Capital and Ordinary Acts of Resistance , 2008 .

[51]  J. Nash,et al.  Taxes and the Success of Non-Tax Market-Based Environmental Regulatory Regimes , 2008 .

[52]  D. F. Hawkins,et al.  The Civil Rights Society: The Social Construction of Victims. , 1987 .

[53]  Richard A. Epstein,et al.  Controlling the Cost of Medical Care: A Dose of Deregulation , 2008 .

[54]  Daniel Abebe,et al.  A Nation Divided: Eastern China, Western China, and the Problem of Global Warming , 2008 .

[55]  Arnaud Lechevalier,et al.  Why a Constitution , 2005 .

[56]  The impact of outcome orientation and justice concerns on tax compliance: the role of taxpayers' identity. , 2002 .

[57]  Omri Ben-Shahar,et al.  The Myth of the 'Opportunity to Read' in Contract Law , 2009 .

[58]  Donald Black.  Crime as Social Control , 1983 .

[59]  B. Harcourt,et al.  Neoliberal Penality: The Birth of Natural Order, the Illusion of Free Markets , 2008 .

[60]  J. Gibbs.  Control: Sociology's Central Notion , 1989 .

[61]  Richard A. Epstein,et al.  Public Use in a Post-Kelo World , 2009, Supreme Court Economic Review.

[62]  Tom R. Tyler,et al.  Legitimacy and Cooperation: Why Do People Help the Police Fight Crime in Their Communities? , 2010 .

[63]  Robert D. Cooter,et al.  Expressive Law And Economics , 1998, The Journal of Legal Studies.

[64]  Rachel Croson,et al.  The effect of recommended contributions in the voluntary provision of public goods , 2001 .

[65]  Eric A. Posner,et al.  Erga Omnes Norms, Institutionalization, and Constitutionalism in International Law , 2009 .

[66]  Kenneth W. Abbott,et al.  Hard and Soft Law in International Governance , 2000, International Organization.

[67]  Janice Nadler,et al.  Testing the Focal Point Theory of Legal Compliance: The Effect of Third‐Party Expression in an Experimental Hawk/Dove Game , 2005 .

[68]  Richard H. McAdams,et al.  An Attitudinal Theory of Expressive Law , 2000 .

[69]  Robin S Stryker,et al.  Rules, Resources, and Legitimacy Processes: Some Implications for Social Conflict, Order, and Change , 1994, American Journal of Sociology.

[70]  D. Kahneman,et al.  Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias , 1991 .

[71]  Richard A. Epstein,et al.  Bell Atlantic v. Twombly: How Motions to Dismiss Become (Disguised) Summary Judgments , 2008 .

[72]  L. Edelman.  Rivers of Law and Contested Terrain: A Law and Society Approach to Economic Rationality , 2004 .

[73]  M. Silberman.  Toward a theory of criminal deterrence. , 1976 .

[74]  S. Silbey,et al.  The Common Place of Law: Stories from Everyday Life , 1998 .

[75]  T. Tyler.  Why People Obey the Law , 2021 .

[76]  Gerald N. Rosenberg.  The hollow hope : can courts bring about social change? , 1992 .