Number range CHAPTER© 2006 Thomson/West. No Claim to Orig. U.S. Govt.
Works.

86 CNLLR 777

86 Cornell L. Rev. 777

**(Cite as: 86 Cornell L. Rev. 777)**

\<KeyCite Citations\>

Cornell Law Review

May, 2001

Article

**\*777** INSIDE THE JUDICIAL MIND

Chris Guthrie \[FNd1\]

Jeffrey J. Rachlinski \[FNdd1\]

Andrew J. Wistrich \[FNddd1\]

Copyright © 2001 Cornell University; Chris Guthrie; Jeffrey J.
Rachlinski;

Andrew J. Wistrich

Introduction
\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....
778

I. The Study
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784

A. Participants
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B. Procedure
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786

II\. Results
\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....
787

A. Anchoring
\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
787

1\. Anchoring: Our Materials
\...\...\...\...\...\...\...\...\...\...\...\.... 790

2\. Anchoring: Results
\...\...\...\...\...\...\...\...\...\...\...\...\...\.... 791

3\. Anchoring: Discussion
\...\...\...\...\...\...\...\...\...\...\...\...\.... 792

B. Framing
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794

1\. Framing: Our Materials
\...\...\...\...\...\...\...\...\...\...\...\...\... 796

2\. Framing: Results
\...\...\...\...\...\...\...\...\...\...\...\...\...\...\... 797

3\. Framing: Discussion
\...\...\...\...\...\...\...\...\...\...\...\...\...\... 797

C. Hindsight Bias
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1\. Hindsight Bias: Our Materials
\...\...\...\...\...\...\...\...\...\..... 801

2\. Hindsight Bias: Results
\...\...\...\...\...\...\...\...\...\...\...\..... 802

3\. Hindsight Bias: Discussion
\...\...\...\...\...\...\...\...\...\...\..... 803

D. Representativeness Heuristic
\...\...\...\...\...\...\...\...\...\...\..... 805

1\. Representativeness Heuristic: Our Materials \...\...\...\...\...\...
808

2\. Representativeness Heuristic: Results
\...\...\...\...\...\...\...\... 809

3\. Representativeness Heuristic: Discussion
\...\...\...\...\...\...\... 810

E. Egocentric Biases
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1\. Egocentric Biases: Our Materials
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2\. Egocentric Biases: Results
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3\. Egocentric Biases: Discussion
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F. Cognitive Illusions in Judges and Other Decision Makers \...\.....
816

G. Do These Findings Apply to Judges in the Courtroom? \...\...\...\...
819

III\. General Discussion and Implications
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A. Improving Judges\' Judgment
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1\. Adopting Multiple Perspectives
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2\. Limiting Heuristics to Normatively Appropriate Circumstances . 823

3\. Reducing Reliance on Tainted Judgments
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4\. A Note on Judicial Specialization
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B. Juries Versus Judges
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C. Legal Rules That Avoid Illusions of Judgment
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Conclusion
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829

**\*778** The quality of the judicial system depends upon the quality of
decisions that judges make. Even the most talented and dedicated judges
surely commit occasional mistakes, but the public understandably expects
judges to avoid systematic errors. This expectation, however, might be
unrealistic. Psychologists who study human judgment and choice have
learned that people frequently fall prey to cognitive illusions that
produce systematic errors in judgment. Even though judges are
experienced, well-trained, and highly motivated decision makers, they
might be vulnerable to cognitive illusions. We report the results of an
empirical study designed to determine whether five common cognitive
illusions (anchoring, framing, hindsight bias, the representativeness
heuristic, and egocentric biases) would influence the decision-making
processes of a sample of 167 federal magistrate judges. Although the
judges in our study appeared somewhat less susceptible to two of these
illusions (framing effects and the representativeness heuristic) than
lay decision makers, we found that each of the five illusions we tested
had a significant impact on judicial decision making. Judges, it seems,
are human. Like the rest of us, their judgment is affected by cognitive
illusions that can produce systematic errors in judgment.

Introduction

Alexander Hamilton observed that judges in a constitutional democracy
possess \"neither force nor will but merely judgment.\" \[FN1\] The
**\*779** judicial role has expanded since Hamilton\'s day, \[FN2\] but
the institutional legitimacy of the judiciary still depends on the
quality of the judgments that judges make. Even the most talented and
dedicated judges surely commit occasional mistakes, but the public
understandably expects judges to avoid systematic errors. \[FN3\] This
expectation, however, might be unrealistic. Empirical evidence suggests
that even highly qualified judges inevitably rely on cognitive
decision-making processes that can produce systematic errors in
judgment.

Legal scholars representing various schools of thought have long argued
that judges do not merely find facts or apply legal principles in a
completely accurate and unbiased fashion. Legal realists have argued
that judges make choices that reflect their political ideology; \[FN4\]
proponents of critical legal studies have complained that judges favor
the existing power structure; \[FN5\] critical race and feminist
scholars have argued that race and gender heavily influence judicial
decisions; \[FN6\] and law-and-economics scholars have asserted that
judges make self-serving **\*780** decisions designed to advance their
political fortunes. \[FN7\] Our research, however, identifies a more
fundamental source of systematic judicial error: wholly apart from
political orientation and self-interest, the very nature of human
thought can induce judges to make consistent and predictable mistakes in
particular situations.

Our thesis arises from psychological research on human judgment and
choice. Psychologists have learned that human beings rely on mental
shortcuts, which psychologists often refer to as \"heuristics,\" to make
complex decisions. \[FN8\] Reliance on these heuristics facilitates good
judgment most of the time, but it can also produce systematic errors in
judgment. \[FN9\] Just as certain patterns of visual stimuli can fool
people\'s eyesight, leading them to see things that are not really
there, certain fact patterns can fool people\'s judgment, leading them
to believe things that are not really true. \[FN10\] Reliance on these
heuristics can create cognitive illusions that produce erroneous
judgments. \[FN11\]

Decades of research on juries indicates that cognitive illusions
adversely affect the quality of adjudication. \[FN12\] Researchers have
found, for example, that juries believe that litigants should have
predicted events that no one could have predicted, \[FN13\] allow
irrelevant or inadmissible information to influence liability
determinations, \[FN14\] defer to arbitrary **\*781** numerical
estimates, \[FN15\] and rely on incoherent methods to calculate damages.
\[FN16\]

But what about judges? In the day-to-day operation of the legal system,
judges are much more important than juries. \[FN17\] They decide roughly
as many cases at trial as juries do, \[FN18\] they determine the outcome
of roughly seven times as many cases as juries by ruling on dispositive
motions, and they often play an active role in settling cases. \[FN19\]
Even in those cases that juries decide, judges preside. They determine
what evidence juries will be allowed to hear and interpret and instruct
juries on the law they are to apply. Therefore, understanding judicial
decision making is the key to understanding the outcome of particular
cases and the development of law. As Jerome Frank put it, if judicial
decisions are \"based on judge\'s hunches, then the way in which the
judge gets his hunches is the key to the judicial process. Whatever
produces the judge\'s hunches makes the law.\" \[FN20\]

Despite the important role that judges play in the courtroom,
psychologists have focused their research efforts almost exclusively on
juries. Consequently, as several judges themselves have complained, few
systematic studies of judicial decision making exist. \[FN21\] Most of
the empirical **\*782** work on judicial decision making has been
motivated by concerns that judges make decisions that are self-serving
or politically driven. \[FN22\] Few have dealt with the sources of
judicial error. \[FN23\] As a result of the scarcity of research on the
topic, even the most learned judges have acknowledged that they do not
understand how judges make decisions. \[FN24\]

Psychologists suspect that even though judges are experienced,
well-trained, and highly motivated decision makers, they are vulnerable
to cognitive illusions. \[FN25\] Research on human judgment and choice
indirectly supports this suspicion. Empirical studies demonstrate that
cognitive illusions plague assessments that many professionals,
including doctors, real estate appraisers, engineers, accountants,
options **\*783** traders, military leaders, and psychologists, make.
\[FN26\] Even lawyers fall prey to cognitive illusions. \[FN27\]
Inasmuch as \"\[j\]udging is choice,\" \[FN28\] the conclusions drawn
from psychological research on human judgment and choice likely apply to
judges as well. \[FN29\] Furthermore, judges make decisions under
uncertain, time-pressured conditions that encourage reliance on
cognitive shortcuts that sometimes cause illusions of judgment.
Nevertheless, without empirical evidence, the assertion that cognitive
illusions affect judges remains mere conjecture.

**\*784** To explore the influence of cognitive illusions on judicial
decision making, we conducted an empirical study. In our study, we
sought to determine whether five common cognitive illusions influence
the way judges make decisions using a sample of 167 federal magistrate
judges. We tested for the influence of: anchoring (making estimates
based on irrelevant starting points); framing (treating economically
equivalent gains and losses differently); hindsight bias (perceiving
past events to have been more predictable than they actually were); the
representativeness heuristic (ignoring important background statistical
information in favor of individuating information); and egocentric
biases (overestimating one\'s own abilities). We found that each of
these cognitive illusions influenced the decision-making processes of
the judges in our study. Although the judges displayed less
vulnerability to two of the five illusions than other experts and
laypersons, the results demonstrate that under certain circumstances
judges rely on heuristics that can lead to systematically erroneous
judgments. In short, our study provides empirical support for Jerome
Frank\'s assertion that \"\[w\]hen all is said and done, we must face
the fact that judges are human.\" \[FN30\]

The results of our research raise questions for judges, litigants, and
the justice system as a whole. For example: what steps, if any, can
judges take to improve their decision making? Should they take these
steps? Does judicial susceptibility to cognitive illusions affect the
optimal allocation of decision-making responsibility between judges and
juries? Should courts or legislatures adopt rules of civil procedure,
rules of evidence, or substantive legal standards designed to minimize
the adverse effects of cognitive illusions on the quality of judicial
decision making? Have they done so already?

After describing our methodology in Part I and presenting our results in
Part II, we explore these questions in Part III. We conclude on a
hopeful note. Although the evidence we present indicates that judges
commit predictable errors of judgment, we are optimistic that judges,
litigants, and legislatures can take steps-and in some instances,
already have taken steps-to avoid or minimize the impact of such errors.

I The Study

A. Participants

We recruited 167 federal magistrate judges to participate in our study.
Congress created the modern office of the federal magistrate **\*785**
judge when it enacted the Federal Magistrates Act of 1968. \[FN31\]
Although the role that magistrate judges play varies from district to
district, they perform many (although not all) of the functions federal
district judges perform. \[FN32\] Over the years, Congress has steadily
increased the responsibilities that magistrate judges may undertake,
which now include the power to conduct civil trials with the litigants\'
consent. \[FN33\] In 1999, the 519 federal magistrate judges handled
282,933 preliminary criminal proceedings, \[FN34\] 63,931 civil
pre-trial conferences, \[FN35\] and entered final judgment in 11,320
cases litigated by consent in front of magistrate judges (approximately
1500 of which resulted in trials). \[FN36\]

Federal magistrate judges are selected by a careful appointment process
designed to be based on merit. To obtain eight-year, renewable
appointments, candidates for federal magistrate judgeships are evaluated
by \"merit selection panels\" charged with \"identifying and
recommending persons who are best qualified to fill such positions.\"
\[FN37\] Based on these recommendations, the district judges in the
relevant district vote for their preferred applicant. \[FN38\] The
appointment process reflects an effort to identify and appoint skilled
decision makers.

Although the entire sample of judges who graciously agreed to
participate in our study were federal magistrate judges, we do not
believe that our results are in any way unique to this group. Like other
state and federal judges, magistrate judges typically enjoyed successful
careers in law practice. Some have had prior judicial experience. Our
sample was drawn from a large group of magistrate judges attending
**\*786** an educational conference, who had no special interest in
psychology or psychological research. Additionally, a handful of other
studies have shown that cognitive illusions affect judges of all kinds.
\[FN39\]

B. Procedure

The magistrate judges who participated in our study did so as part of
the Federal Judicial Center\'s Workshop for Magistrate Judges II in New
Orleans in November 1999. At this workshop, we presented the opening
panel, entitled \"Psychology of Judging.\" Before beginning our panel
presentation, we randomly distributed differing versions of a five-page
questionnaire to the judges in attendance. \[FN40\] We asked the judges
to read the questionnaire, to respond to each of the questions, and to
refrain from discussing the questionnaire until after we retrieved the
completed questionnaires from all of the participants. We did not ask
the judges to identify themselves on the questionnaire, so all responses
were anonymous.

The five-page questionnaire began with a paragraph-long set of
instructions. In it, we asked the judges to read and respond to the
questions independently, informed the judges that participation in the
study was voluntary, and explained that we intended to use the aggregate
responses to illustrate points during our presentation. \[FN41\] On the
subsequent pages, the questionnaire presented each judge with five
items, consisting of a background description and one or more questions.
Each item tested for the influence of one of the five cognitive
illusions described below. \[FN42\] To create controlled experimental
conditions, we devised multiple variations of three of the items tested
(though the first page of the questionnaire gave no indication of this).
\[FN43\]

**\*787** The fifth and final page of the questionnaire gave the judges
the opportunity to choose to limit the use of their answers to the
educational workshop, excluding them from further analysis or
publication. \[FN44\] One judge out of the 168 who returned
questionnaires chose to exercise this option, so we removed that
questionnaire from consideration in this Article, leaving a sample of
167 judges.

Completing the questionnaire took approximately ten minutes. During its
administration, the judges remained in the room, kept silent, and
appeared to take the process seriously. We have no way of knowing for
sure how many, if any, of the judges refused to return their
questionnaires, but we believe most of the judges in attendance
completed them and turned them in. The room, which was nearly full,
seated a maximum of two hundred persons. In all, the sample of 167
judges comprised nearly one-third of the 519 federal magistrate judges
on the bench at the time. \[FN45\]

II Results

We designed the questionnaires to assess the influence of the following
five common cognitive illusions on judicial decision making: anchoring,
framing, hindsight bias, the representativeness heuristic, and
egocentric biases. These illusions are among the most well documented in
the psychological literature on judgment and choice and they have been
shown to affect litigants, lawyers, and the legal system as a whole. We
found that these cognitive illusions also affect the legal system\'s
most important and powerful actors: judges.

A. Anchoring

When people make numerical estimates (e.g., the fair market value of a
house), they commonly rely on the initial value available to them (e.g.,
the list price). That initial value tends to \"anchor\" their **\*788**
final estimates. \[FN46\] In many situations, reliance on an anchor is
reasonable because many anchors convey relevant information about the
actual value of an item (although people might rely too heavily on
anchors). The problem, however, is that anchors that do not provide any
information about the actual value of an item also influence judgment.

In one early study of anchoring, Professors Amos Tversky and Daniel
Kahneman asked participants to estimate the percentage of African
countries in the United Nations. \[FN47\] Before asking for this
estimate, they informed the participants that the number was either
higher or lower than a numerical value identified by the spin of a
\"wheel of fortune.\" \[FN48\] Tversky and Kahneman had secretly rigged
this \"wheel of fortune\" to stop either on ten or sixty-five. \[FN49\]
When the wheel landed on ten, participants provided a median estimate of
25%; when the wheel landed on sixty-five, participants provided a median
estimate of 45%. \[FN50\] Even though the initial values were clearly
irrelevant to the correct answer, the initial values had a pronounced
impact on the participants\' responses. \[FN51\]

Anchors affect judgment by changing the standard of reference that
people use when making numeric judgments. Anchors induce people to
consider seriously the possibility that the real value is similar to the
anchor, thereby leading them to envision circumstances under which the
anchor would be correct. \[FN52\] Even when people conclude that an
anchor provides no useful information, mentally testing the validity of
the anchor causes people to adjust their estimates upward or downward
toward that anchor. As a consequence, even extreme, wholly absurd
anchors can affect judgment. For example, students provided higher
estimates of the average price of a college textbook when they were
first asked to determine whether it was higher or lower than \$7128.53.
\[FN53\] This anchor, although ridiculously high, forces students to
consider the possibility that textbook pricetags are higher than they
might have otherwise believed. Similarly, people provided higher
estimates of the average annual temperature in San Francisco when first
asked to determine whether it was higher or **\*789** lower than 558
degrees. \[FN54\] Such a high anchor induces people to consider the
possibility that the real average is quite high.

Litigation frequently produces anchors. \[FN55\] In settlement talks,
for instance, litigants can be influenced by the opening offers that
their adversaries make. Professors Russell Korobkin and Chris Guthrie
found that people evaluating hypothetical settlement offers were more
likely to accept a \$12,000 final settlement offer when it followed a
\$2000 opening offer than when it followed a \$10,000 opening offer.
\[FN56\] Korobkin and Guthrie hypothesized that those who received the
\$2000 opening offer expected to settle for a relatively small amount,
so the \$12,000 final offer seemed generous by comparison. \[FN57\] On
the other hand, those who received the \$10,000 opening offer expected
to settle for relatively more, so the \$12,000 final offer seemed
relatively stingy. \[FN58\] The opening offers effectively \"anchored
subjects\' expectations\" and influenced their settlement preferences.
\[FN59\]

Legal scholars have long thought that anchors influence jurors. \[FN60\]
In five separate studies, researchers have found that plaintiffs\'
lawyers\' damage requests influenced mock jurors\' assessments of the
appropriate amount of damages to award in civil suits. \[FN61\] In one
study, for instance, mock jurors awarded slightly more than \$90,000
when the plaintiff\'s lawyer requested \$100,000 in damages; but when
the plaintiff\'s lawyer requested \$500,000 in damages in the very same
case, mock jurors awarded nearly \$300,000. \[FN62\] Even silly and
outrageous damage requests can influence juror decision making. For
example, mock jurors in another study awarded the plaintiff
substantially more in damages when the plaintiff\'s lawyer requested an
outlandish \$1 billion than when the plaintiff\'s lawyer requested a
more plausible amount. \[FN63\] The moral of these anchoring studies
seems to be, \"Ask **\*790** and ye shall receive.\" In each, \"when
more money was requested for damages by the plaintiff\'s attorney, the
jurors awarded more.\" \[FN64\]

Recognition of the potentially pernicious effect of anchoring on damage
awards has triggered calls for reform. \[FN65\] Some of these reform
efforts have included suggestions to replace juries with judges,
\[FN66\] presumably on the theory that judges will be immune from
anchoring effects. Indeed, because experience can mitigate the influence
of arbitrary anchors, \[FN67\] there is reason to believe that this
presumption might be accurate.

1\. Anchoring: Our Materials

To test whether judges\' damage determinations might be influenced by
anchoring effects, we presented each of the judges with the following
description of a serious personal injury suit in which only damages were
at issue:

Suppose that you are presiding over a personal injury lawsuit that is in
federal court based on diversity jurisdiction. The defendant is a major
company in the package delivery business. The plaintiff was badly
injured after being struck by one of the defendant\'s trucks when its
brakes failed at a traffic light. Subsequent investigations revealed
that the braking system on the truck was faulty, and that the truck had
not been properly maintained by the defendant. The plaintiff was
hospitalized for several months, and has been in a wheelchair ever
since, unable to use his legs. He had been earning a good living as a
free-lance electrician and had built up a steady base of loyal
customers. The plaintiff has requested damages for lost wages,
hospitalization, and pain and suffering, but has not specified an
amount. Both parties have waived their rights to a jury trial.

We randomly assigned the judges to either a \"No Anchor\" condition or
an \"Anchor\" condition. We provided judges in the No Anchor group with
the paragraph above and asked them, \"how much would **\*791** you award
the plaintiff in compensatory damages?\" We provided the judges in the
Anchor condition with the same information. In addition, we informed the
subjects in the Anchor condition that \"\[t\]he defendant has moved for
dismissal of the case, arguing that it does not meet the jurisdictional
minimum for a diversity case of \$75,000.\" \[FN68\] We asked these
judges to rule on the motion, and then asked them \"\[i\]f you deny the
motion, how much would you award the plaintiff in compensatory
damages?\" Because the plaintiff clearly had incurred damages greater
than \$75,000, the motion was meritless. Nevertheless, we hypothesized
that the \$75,000 would serve as an anchor, resulting in lower damage
awards from those judges who first ruled on the motion.

2\. Anchoring: Results

Ruling on the motion had a large effect on damage awards. The sixty-six
judges in the No Anchor condition indicated that they would award
plaintiff an average of \$1,249,000 while the fifty judges in the Anchor
condition awarded an average of \$882,000. \[FN69\] The difference
between the two groups was statistically significant. \[FN70\]

Only two (2.3%) of the judges in the Anchor condition granted the motion
to dismiss. \[FN71\] By voting overwhelmingly to deny the motion to
dismiss, the judges indicated that the \$75,000 jurisdictional minimum
**\*792** contained no reliable information regarding the plaintiff\'s
damages. Nonetheless, the \$75,000 jurisdictional minimum anchored their
damage awards. In this hypothetical case, asking the judges to rule on
this frivlous motion depressed average damage awards by more than
\$350,000 (or 29.4%).

Like most damage-award data, our results were positively skewed; most
awards were low, but a small number of awards were markedly higher than
the rest. Because such skewed results can render mean results
unreliable, we report the median and quartile statistics in Table 1:
\[FN72\]

Table 1: Anchoring: Quartile Results

Condition 1st Quartile (25th 2nd Quartile 3d Quartile (75th

percentile) (median) percentile)

No Anchor \$500,000 \$1,000,000 \$1,925,000

Anchor \$288,000 \$882,000 \$1,000,000

The motion had a pronounced effect on the judges at all response levels.
At the first and third quartiles, for example, judges assigned to the
Anchor condition awarded roughly half the damages awarded by judges
assigned to the No Anchor condition (i.e., \$288,000 vs. \$500,000 and
\$1 million vs. \$1.925 million). Also, three-quarters of the judges in
the Anchor condition awarded damages that were lower than half of those
awarded by the judges in the No Anchor condition.

3\. Anchoring: Discussion

The judges in our study relied on an anchor\--the \$75,000
jurisdictional minimum raised by the motion to dismiss\--to estimate
damage awards in a hypothetical personal-injury case. Ruling on this
motion might have caused the judges to consider the possibility that the
true damages in this case were exceptionally low. If so, the judges
would have been thinking about cases in which the maximum awards are
quite low when they made their damage estimates. Consequently, they
might have mentally filled in the factual gaps in our hypothetical with
details that would have made an award greater than \$75,000 implausible,
thereby producing comparatively low damage estimates. A process like
this would be consistent with the research on how anchoring works.

Alternatively, judges in our study might have believed that the anchor
signaled relevant information. They might, for example, have **\*793**
reasoned that a defendant would have been more inclined to file such a
motion in a case where the damages were actually low. (The opposite
inference might, in fact, be more plausible, inasmuch as frivolous
motions are usually designed to delay an adverse outcome, such as a high
damage award.) If the judges believed this, then it might have been
reasonable for them to infer from the motion that the defendant believed
that the damages were low. The psychological literature on anchoring,
however, combined with the magnitude of the difference between the
Anchor and No Anchor groups in our study, suggests that anchoring
provides a better account of our results than does this alternative
explanation.

The susceptibility of judges to anchoring effects does not suggest that
defendants should file motions to dismiss for lack of subject-matter
jurisdiction as a way of anchoring judges in actual cases. Not only are
frivolous motions subject to sanctions, \[FN73\] but these motions would
not necessarily anchor judges in actual cases. In an actual case, the
judge would dispose of this type of a motion long before awarding
damages. This temporal separation of the motion from the determination
of the damage award would dull any anchoring effect the motion might
otherwise have. Furthermore, several other anchors would likely be
available at trial. Although we do not entirely discount the possible
effects that such motions might have on judicial thought processes, we
recognize that many other factors might affect the outcome.

Rather than suggesting a disingenuous litigation strategy, these data
show how easily anchors can creep into the process and affect the way
judges think about damage awards. Commentators have worried about the
effects of plaintiffs\' damage requests on juries, \[FN74\] but our data
suggest that these damage requests might also affect judges. The
potential for statutory damage caps to anchor judges is equally
troubling. Judges might be able to keep juries ignorant of damage caps,
\[FN75\] but they obviously cannot blind themselves to the caps.
Ironically, then, the best way to prevent a statutory damage cap from
anchoring a damage award might be to vest that decision-making power in
a jury that is ignorant of the cap.

The potentially pernicious effects of anchoring also suggest a source of
error in both the civil and criminal justice systems. In civil cases,
the influence on judges of misleading anchors, such as litigants\'
**\*794** requests for damage awards, can produce biased damage awards.
In criminal cases, the influence on judges of biased or misleading
anchors, such as prosecutor or defense attorney sentencing
recommendations, can produce biased criminal sentences. In both cases,
constraints, such as damage caps or mandatory sentencing guidelines,
might reduce the influence that biased or irrelevant anchors can have on
judicial damage awards and sentences. For example, criminal sentencing
guidelines that constrain the range of available sentences based on
factors such as a defendant\'s criminal conduct will provide stable,
unbiased anchors. Instead of the potentially biased recommendations from
attorneys, the sentencing guidelines will provide judges with a neutral
source of anchors. Although judges may bristle at the constraint on
their discretion that sentencing guidelines impose, these guidelines
reduce the influence of potentially biased anchors. Sentencing
guidelines (and damage caps), however, can also inappropriately skew
criminal sentences (and damage awards) if they provide anchors that are
unrelated to an appropriate sentence (and damage award).

B. Framing

When people confront risky decisions\--such as deciding whether to
settle a case or to proceed to trial\--they categorize their decision
options as potential gains or losses from a salient reference point such
as the status quo. \[FN76\] This categorization, or \"framing,\" of
decision options influences the way people evaluate options and affects
their willingness to incur risk. People tend to make risk-averse
decisions when choosing between options that appear to represent gains
and risk-seeking decisions when choosing between options that appear to
represent losses. \[FN77\] For example, most people prefer a certain
\$100 gain to a 50% chance of winning \$200 but prefer a 50% chance of
losing \$200 to a certain \$100 loss. \[FN78\]

**\*795** From a rational-choice perspective, people\'s risk preferences
should depend upon their wealth relative to the size of the stakes
involved. \[FN79\] In practice, however, people tend not to make such
normatively appropriate calculations. Instead, people make choices
designed to maintain or slightly improve the status quo, which
translates into risk-averse choices for most gains and risk-seeking
choices for most losses. \[FN80\]

Framing can have a profound impact on civil lawsuits because litigation
produces a natural frame. \[FN81\] In most lawsuits, plaintiffs choose
either to accept a certain settlement from the defendant or to gamble,
hoping that further litigation will produce a larger gain. Most
defendants, by contrast, choose either to pay a certain settlement to
the plaintiff or to gamble that further litigation will reduce the
amount that they must pay. Thus, plaintiffs often choose between options
that appear to represent gains, while defendants often choose between
options that appear to represent losses. As such, plaintiffs are more
likely to prefer settlement, the risk-averse option, while defendants
are more likely to prefer trial, the risk-seeking option. \[FN82\]

To demonstrate this phenomenon, Jeffrey Rachlinski presented a simple
litigation problem to law students, half of whom played the role of
plaintiff and half of whom played the role of defendant. \[FN83\]
Plaintiff-subjects faced a choice between a certain \$200,000 settlement
offer and a 50% chance of winning \$400,000 at trial (and a
corresponding 50% chance of winning nothing), while defendant-subjects
faced a choice between paying a \$200,000 settlement to plaintiff and
facing a 50% chance of losing \$400,000 at trial (and a 50% chance of
losing nothing). \[FN84\] Rachlinski found that 77% of
plaintiff-subjects (choosing between gains), but only 31% of
defendant-subjects (choosing between losses), preferred settlement.
\[FN85\] Rachlinski and others have generated additional experimental
data demonstrating these **\*796** framing effects, \[FN86\] and
Rachlinski has also found evidence of framing effects among litigants in
real cases. \[FN87\] Taken together, this work provides powerful support
for the proposition that plaintiffs are generally more likely than
defendants to find settlement attractive because of the way litigants
frame their decision options. \[FN88\]

1\. Framing: Our Materials

Judges, of course, are neither plaintiffs nor defendants in the typical
civil suit, but they often play an active role in supervising settlement
talks. Does framing lead judges to perceive the settlement decisions of
plaintiffs and defendants differently? To determine whether framing
might impact judges\' settlement recommendations, we presented each of
the judges with a hypothetical fact pattern labeled \"Suit and
Settlement.\" This item included, for all judges, the following
description of a lawsuit:

Imagine that you are presiding over a case in which a plaintiff has sued
a defendant for \$200,000 in a copyright action. Both the plaintiff and
the defendant are mid-sized publishing companies with annual revenues of
about \$2.5 million per year. They are represented by competent
attorneys who have not tried cases before you in the past. You believe
that the case is a simple one, but it presents some tough factual
questions. There is no dispute as to the amount at stake, only as to
whether the defendant\'s actions infringed on the plaintiff\'s
copyright. You believe that the plaintiff has a 50% chance of recovering
the full \$200,000 and a 50% chance of recovering \$0. You expect that
should the parties fail to settle, each will spend approximately
\$50,000 at trial in litigation expenses. Assume that there is no chance
that the losing party at trial will have to compensate the winner for
these expenses.

In the second paragraph of this item, the judges learned that, \"\[t\]he
case is approaching a trial date and you have scheduled a settlement
conference.\" Half of the judges (\"Plaintiff/Gains\" condition)
reviewed the case from the plaintiff\'s perspective, in which the
choices involved potential gains. These judges read the following: \"You
have learned that the defendant intends to offer to pay the plaintiff
\$60,000 to settle the case. Do you believe that the plaintiff should be
**\*797** willing to accept \$60,000 to settle the case?\" Thus, the
judges learned that the plaintiff faced a choice between a certain
\$60,000 gain or an expected trial outcome of \$50,000 (i.e., 50% x
\$200,000 judgment + 50% x \$0 judgment - \$50,000 attorney\'s fees =
\$50,000).

The other half of the judges (\"Defendant/Losses\" condition) reviewed
the case from the defendant\'s perspective, in which the choices
involved potential losses. These judges read the following: \"You have
learned that the plaintiff intends to offer to accept \$140,000 to
settle the case. Do you believe that the defendant should be willing to
pay \$140,000 to settle the case?\" Thus, the judges assigned to this
condition learned that the defendant faced a choice between a certain
\$140,000 loss or an expected trial outcome of -\$150,000 (i.e., 50% x -
\$200,000 judgment + 50% x \$0 judgment - \$50,000 attorney\'s fees =
-\$150,000). All judges were then asked to circle \"Yes\" or \"No.\"

We presented judges in both conditions with economically identical
choices to evaluate. In a copyright dispute like this one, the judge
must decide who owns a sum of money generated by a piece of intellectual
property. Settling this sort of dispute requires the judge to help the
parties decide how to divide that fixed pie. Regardless of whether they
were assigned to the plaintiff or to the defendant frames, the judges
assessed a litigant confronted with a choice between obtaining \$60,000
of the earnings for sure, or a gamble with an expected value of only
\$50,000. The only difference between the two conditions was the status
quo, that is, which party held the \$200,000 sum at the outset of the
lawsuit.

2\. Framing: Results

The results varied by frame. Among the judges evaluating the case from
the plaintiff\'s perspective, 39.8% (thirty-three out of eighty-three)
indicated that they thought the plaintiff should accept the \$60,000
settlement offer, but only 25% (twenty out of eighty) of the judges
evaluating the case from the defendant\'s perspective indicated that
they thought the defendant should pay the \$140,000 settlement payment
proposed by plaintiff. \[FN89\] The difference between these two groups
was statistically significant. \[FN90\] Thus, like litigants, judges
appear to be influenced by the way decision problems are framed.

3\. Framing: Discussion

The framing of the settlement decision affected judges in our study.
Although the hypothetical litigants in this problem faced
settlement**\*798** offers that were identical in terms of their
expected value, the materials created the illusion that the plaintiff
faced a choice between potential gains and that the defendant faced a
choice between potential losses. From the plaintiff\'s perspective,
settlement seemed relatively more attractive, while from the
defendant\'s perspective, trial seemed relatively more attractive, even
though the two perspectives presented identical economic choices.

Framing can detrimentally impact judicial management of lawsuits.
Judges, who frequently serve as mediators during conferences, have the
power to influence the settlement process. \[FN91\] If framing affects
judges\' assessments of which party should make greater concessions to
settle a case, then framing favors defendants. Even though the data on
settlement show that defendants seem most resistant to settlement and
would thus benefit most from judicial encouragement to settle, \[FN92\]
the data in our study suggest that judges are likely to lean more
heavily on plaintiffs than on defendants. By urging plaintiffs to accept
less than is appropriate or by failing to urge defendants to pay an
appropriate amount, judges might settle fewer cases than they otherwise
would or might promote settlements that undercompensate plaintiffs and
underdeter defendants.

Framing also has influenced the development of legal doctrine. \[FN93\]
When ownership of a commodity is in doubt, the courts traditionally
favor those who hold possession of the good\--even when possession is
arbitrary. \[FN94\] For example, if a seller contracts to sell a car to
two different buyers, courts will often award permanent ownership to the
party holding possession at the time the suit is brought. \[FN95\]
Several areas of law, in fact, create similarly arbitrary distinctions
between gains and losses. \[FN96\] While these distinctions might be
inconsistent with an economic approach they are consistent with framing
effects. The judges who created the rules giving rise to these
disparities may have done so out of an implicit belief that gains should
be treated differently from losses.

Interestingly, apart from framing effects, a majority of the judges
(67.5%, or 110 out of 163) felt that the parties should decline to
settle, despite the fact that settlement offers from both the
plaintiff\'s and defendant\'s perspectives exceeded the expected value
of trial. This unexpected result might indicate that judges are
relatively more risk-**\*799** seeking (or trial-seeking) than others.
We suspect, however, that another psychological explanation accounts for
this finding. Although it is true that the settlement offers exceeded
the expected benefits of litigation for both parties, they also
represented only a fraction of the potential settlement value available.
\[FN97\] For either party, accepting the settlement would effectively
concede 70% of the property\'s value to the opposing party. \[FN98\]
Because the facts suggest that each party has an equivalent claim to the
property, the judges may have felt that an even split was more
appropriate. In experiments in which participants must arbitrarily split
a fixed pie, researchers have consistently found that people consider
anything other than an equal split unfair. \[FN99\] Judges in our study
responded much like participants in these studies. This result suggests
that litigants trying to negotiate a settlement with the assistance of a
mediator should justify their settlement proposals in terms of fairness
not merely economic rationality.

C. Hindsight Bias

Hindsight vision is 20/20. People overstate their own ability to have
predicted the past and believe that others should have been able to
predict events better than was possible. \[FN100\] Psychologists call
this tendency for people to overestimate the predictability of past
events the \"hindsight bias.\" \[FN101\] It occurs because learning an
outcome causes people to update their beliefs about the world. \[FN102\]
People then rely on these new beliefs to generate estimates of what was
predictable, but they ignore the change in their beliefs that learning
the outcome inspired. \[FN103\]

**\*800** Few judgments in ordinary life require people to assess the
predictability of past outcomes, but such judgments are pervasive in the
law. \[FN104\] Several studies have demonstrated that the hindsight bias
influences judgments of legal liability. \[FN105\] Kim Kamin and Jeffrey
Rachlinski, for example, compared foresight decisions regarding whether
to take a precaution against flooding with comparable hindsight
evaluations of whether the failure to take this precaution was
negligent. \[FN106\] They instructed participants judging in foresight
to recommend the precaution if they believed that the flood was more
than 10% likely to occur in any given year (which was based on a
cost-benefit comparison of the precaution and the damage that a flood
would likely cause). \[FN107\] The researchers told the participants
judging in hindsight that the precaution had not been taken and that a
flood causing \$1 million in damage had occurred. \[FN108\] They
instructed these participants to find the defendant liable for the flood
if the likelihood of the flood, from the perspective of the defendant
before the fact, was greater than 10% in any given year. \[FN109\]
Although both sets of participants reviewed identical information about
the likelihood of a flood, the participants reached different
conclusions about appropriate defendant behavior. \[FN110\] Only 24% of
foresight participants concluded that the likelihood of a flood
justified taking the precaution, while 57% of the hindsight participants
concluded that the flood was so likely that the failure to take the
precaution was negligent. \[FN111\] Because of the hindsight bias, the
decision to refrain from taking the precaution seemed reasonable to most
participants ex ante, but it seemed unreasonable to most participants ex
post.

Because courts usually evaluate events after the fact, they are
vulnerable to the hindsight bias. \[FN112\] Besides negligence
determinations, the hindsight bias likely influences claims of
ineffective assistance of counsel (decisions a lawyer makes in the
course of representing a criminal defendant can seem less competent
after the defendant has been convicted), the levying of sanctions under
Rule 11 of the Federal Rules of Civil Procedure (a motion or allegation
seems less meritorious after a court rejects it), and assessments of the
liability of corporate **\*801** officers charged with making false
predictions about their company\'s performance (which can look like
fraud after the predictions fail to come true). \[FN113\] In short, the
hindsight bias is a threat to accurate determinations in many areas of
law.

Recognition of the influence of the hindsight bias on legal judgments
has also inspired a set of proposed reforms, \[FN114\] which include
greater reliance on judges. \[FN115\] This approach is unlikely to be
successful, however, because the hindsight bias is one of the most
robust cognitive illusions. Greater reliance on judges is unlikely to
eliminate its effect on adjudication. \[FN116\] Although experience
reduces the effect of the hindsight bias somewhat, \[FN117\] it does not
eliminate it.

1\. Hindsight Bias: Our Materials

To test whether judges are susceptible to the hindsight bias, we
presented each of the judges who participated in our study with a
hypothetical fact pattern based on an actual case, \[FN118\] labeled
\"Likely Outcome of Appeal\":

In 1991, a state prisoner filed a pro se Section 1983 action in Federal
District Court against the Director of the Department of Criminal
Justice in his state, asserting, among other things, that the prison had
provided him with negligent medical treatment in violation of Section
1983. The district court dismissed his complaint on the ground that the
provision of negligent medical care does not violate Section 1983. The
district court further found that the plaintiff knew his claims were not
actionable because he had made similar claims several years earlier in a
case that had been dismissed by the court. Thus, the district court
sanctioned the plaintiff pursuant to Rule 11, ordering him to obtain the
permission of the Chief **\*802** Judge in the district before filing
any more claims. The plaintiff appealed the district court\'s decision.

We randomly assigned the judges to one of three conditions: the \"Lesser
Sanction\" condition; the \"Affirmed\" condition; or the \"Vacated\"
condition. Judges in each condition learned of a different outcome on
appeal:

. \"Lesser Sanction\": \"The court of appeals ruled that the district
court had abused its discretion under Rule 11 and remanded the case for
imposition of a less onerous Rule 11 sanction against the plaintiff.\"

. \"Affirmed\": \"The court of appeals affirmed the district court\'s
decision to impose this Rule 11 sanction on the plaintiff.\"

. \"Vacated\": \"The court of appeals found that the district court had
abused its discretion and vacated the Rule 11 sanction against the
plaintiff.\"

We asked all of the judges, regardless of the condition to which they
were assigned, to predict which of the three actions the court of
appeals was most likely to have taken\--that is, affirm, vacate, or
remand for lesser sanctions. The materials asked: \"In light of the
facts of the case, as described in the passage above, which of the
following possible outcomes of the appeal was most likely to have
occurred (assume that the three outcomes below are the only possible
ones)?\" The materials then listed the three possible outcomes. If the
judges in our sample were immune from the influence of the hindsight
bias, learning the outcome should not have affected their identification
of the outcome most likely to have occurred.

2\. Hindsight Bias: Results

Knowing the outcome significantly affected judges\' assessments.
\[FN119\] Table 2, below, shows that judges informed of a particular
outcome were much more likely than the other judges to have identified
that outcome as the most likely to have occurred. \[FN120\] Consider,
for example, the judges\' assessment of the likelihood that the court of
appeals would affirm the district court\'s decision. When told that the
court of appeals had affirmed, 81.5% of the judges indicated that they
would have predicted that result. By contrast, only 27.8% of those told
the court of appeals had vacated, and only 40.4% of those told the court
of appeals had remanded for imposition of a lesser sanction, indicated
that an affirmance was the most likely outcome. Learning **\*803** of an
outcome ex ante clearly influenced the judges\' ex post assessments of
the likelihood of various possible outcomes.

Table 2: Hindsight Bias: Percentage of Judges Identifying Each Outcome
as the

Most Likely, By Condition

Outcome Provided % Selecting as Most Likely Outcome

Lesser Affirmed Vacated

Lesser 38.6 40.4 21.1

Affirmed 7.4 81.5 11.1

Vacated 20.4 27.8 51.9

Note: Boldface numbers indicate the percentage of judges identifying the
given outcome as the most likely.

The sum of the percentage of judges in each of the three conditions who
selected the outcome that they were told had occurred as the \"most
likely to have occurred\" was 172%. It would have been 100% if learning
the outcome had had no effect on the judges. Thus, the judges exhibited
a predictable hindsight bias; when they learned that a particular
outcome had occurred, they were much more likely to identify that
outcome as the most likely to have occurred.

3\. Hindsight Bias: Discussion

Learning the alleged outcome on appeal influenced the judges\'
assessments of which outcome had been the most likely. Whether they were
aware of it or not, the judges\' judgments in hindsight were influenced
by knowledge that they could not have had in foresight.

Some have argued that results such as ours do not really reflect an
illusion of judgment but reflect a rational use of new knowledge.
\[FN121\] Proponents of these arguments misunderstand the nature of the
hindsight bias. The hindsight bias does not consist of using known
outcomes to update one\'s beliefs about future events; \[FN122\] that
process is simply learning from experience, which is perfectly rational.
Rather, the hindsight bias consists of using known outcomes to assess
the predictability at some earlier time of something that has already
happened. When we asked the judges in our study to determine what
appellate outcome they would have predicted, the outcome that we
provided to them was irrelevant. Nevertheless, learning the outcome
changed the judges\' beliefs about Rule 11 sanctions in a pro se
prisoner**\*804** case because the judges relied on this new information
to re-predict the past outcome.

Some might criticize the form of our question because we did not
specifically ask the judges to disregard what they had learned but
instead asked them only what they thought was the most likely outcome.
Nevertheless, the questions are formally identical because determining
what one would have predicted requires ignoring what one already knows.
The questions are also functionally identical, as several studies of the
hindsight bias reveal. \[FN123\] For example, studies have found that
asking (as we did) \"what was most likely\" produces identical results
to asking \"what would you have predicted had you not known the
outcome\" and \"what would others who have not been told the outcome
have predicted.\" \[FN124\] Furthermore, our findings are consistent
with other studies showing that judges are vulnerable to the hindsight
bias. \[FN125\]

Our conclusion that the hindsight bias misleads judges has anecdotal
support in some published judicial opinions. For example, the law
governing trusts includes an infamous opinion in which a court held a
trustee liable for failing to sell stock before the stock market crash
of 1929. \[FN126\] The court reasoned that \"\[i\]t was common
knowledge, not only amongst bankers and trust companies, but the general
public as well, that the stock market condition at the time of \[the\]
testator\'s death was an unhealthy one, that values were very much
inflated and that a crash was almost sure to occur.\" \[FN127\]
Obviously, the court\'s ex post assessment of the ex ante likelihood of
the crash was influenced by being aware of the crash. In other similar
cases, courts have held trustees liable for investing in a company in
spite of \"\'disquieting information\' contained in a prospectus\"
\[FN128\] for selling securities at the \"bottom of the market.\"
\[FN129\] How the trustees in these cases were supposed to have known
that the disquieting information was more predictive than the positive
signals that the prospectus included or that a stock price had actually
reached bottom is unclear. The defendants in these cases were victims of
the hindsight bias.

When predicting the likelihood of something after the fact, judges
cannot help but rely on facts that were unavailable before the fact.
Judges\' susceptibility to the hindsight bias is troubling because
judges are frequently expected to suppress their knowledge of some
**\*805** set of facts before making decisions. When deciding whether to
suppress evidence found during a police search, for example, judges are
expected to ignore their knowledge of the outcome of the search for
purposes of determining whether the police had probable cause to conduct
the search. When assessing the reasonableness of precautions taken by a
tort defendant, judges are expected to disregard their knowledge of the
plaintiff\'s ensuing injury. Although we did not test the operation of
the hindsight bias on judicial decision making in these circumstances,
our results suggest that judges are vulnerable to the influence of the
hindsight bias in these and other contexts.

D. Representativeness Heuristic

When people make categorical judgments (e.g., assessing the likelihood
that a criminal defendant is guilty), they tend to base their judgments
on the extent to which the evidence being analyzed (e.g., the
defendant\'s demeanor) is representative of the category. \[FN130\] When
the evidence appears representative of, or similar to, the category
(e.g., defendant is nervous and shifty), people judge the likelihood
that the evidence is a product of that category as high (i.e., evidence
of guilt). When the evidence being analyzed does not resemble the
category (e.g., defendant appears at ease), people judge the likelihood
that the evidence is a product of that category as low (i.e., evidence
of innocence). Psychologists refer to this phenomenon as the
\"representativeness heuristic.\" \[FN131\]

Although the representativeness heuristic is useful, it can lead people
to discount relevant statistical information. In particular, people
undervalue the importance of the frequency with which the underlying
**\*806** category occurs\--this is known as the \"base-rate\"
statistic. \[FN132\] In one study, for example, researchers asked
college students to indicate whether a person who \"is of high
intelligence, although lacking in . . . creativity\[,\] . . . has a
\[high\] need for order and clarity, . . . writ\[es in a\] . . . dull
and mechanical \[fashion\], . . . \[and\] seems to have . . . little
sympathy for other people\" is more likely to be a graduate student in
computer science or in humanities and education. \[FN133\] Although the
participants believed that there were three times as many graduate
students in humanities and education than in computer science, they
rated it far more likely that the person described by the researchers
was a graduate student in computer science. \[FN134\] Even though this
background or base-rate information is obviously highly relevant, people
routinely ignore it or discount it when making categorical judgments.
\[FN135\]

Psychological research does not clearly indicate why people ignore base
rates and rely on the representativeness heuristic when making
categorical judgments. Individuating evidence is more salient and vivid,
and hence more compelling than pallid base-rate statistics. \[FN136\]
Also, because relevant statistical evidence is commonly unavailable, it
might simply be more efficient for people to focus on individuating
evidence. \[FN137\]

What is clear, however, is that excess reliance on the
representativeness heuristic leads people to commit a variety of
decision-making errors. \[FN138\] In legal decision making, for example,
the failure to attend **\*807** to base rates can induce a troublesome
problem known as the \"inverse fallacy.\" \[FN139\] The inverse fallacy
refers to the tendency to treat the probability of a hypothesis given
the evidence (for example, the probability that a defendant was
negligent given that a plaintiff was injured) as the same as, or close
to, the probability of the evidence given the hypothesis (for example,
the probability that the plaintiff would be injured if the defendant
were negligent). \[FN140\]

Suppose, for example, that a forensic expert testifies in a criminal
case that a DNA sample from the defendant matches the DNA sample found
at a crime scene. Further suppose that this expert indicates that the
probability that a randomly selected sample would match the sample from
the crime scene is one in a million. Committing the inverse fallacy here
means believing that the likelihood that the defendant is innocent is
also one in a million. This inference, however, would be incorrect
because the probability that the defendant is innocent also depends on
the size of the population from which the suspect\'s DNA was drawn and
the reliability of the DNA test. \[FN141\] If the defendant were
randomly selected from a population of four million suspects, for
example, one would expect that there are three other people who are just
as likely to have committed the crime as the defendant. Mock jury
research suggests that the inverse fallacy influences jurors\'
assessments of forensic evidence. \[FN142\]

As trained legal professionals, judges might have an advantage over
other experts in these reasoning tasks. One prior study indicated that
graduate training in law reduces the likelihood that a person will
**\*808** commit the inverse fallacy. \[FN143\] Nevertheless, studies
have shown that other professionals who should be adept at such tasks,
such as doctors, commit the fallacy in overwhelming numbers. \[FN144\]

1\. Representativeness Heuristic: Our Materials

To test whether judges would commit the inverse fallacy, we gave the
judges in our study a res ipsa loquitur problem. In an item labeled
\"Evaluation of Probative Value of Evidence in a Torts Case,\" we
presented all of the judges with a paragraph-long description of a case
based loosely on the classic English case, Byrne v. Boadle: \[FN145\]

The plaintiff was passing by a warehouse owned by the defendant when he
was struck by a barrel, resulting in severe injuries. At the time, the
barrel was in the final stages of being hoisted from the ground and
loaded into the warehouse. The defendant\'s employees are not sure how
the barrel broke loose and fell, but they agree that either the barrel
was negligently secured or the rope was faulty. Government safety
inspectors conducted an investigation of the warehouse and determined
that in this warehouse: (1) when barrels are negligently secured, there
is a 90% chance that they will break loose; (2) when barrels are safely
secured, they break loose only 1% of the time; (3) workers negligently
secure barrels only 1 in 1,000 times.

The materials then asked: \"Given these facts, how likely is it that the
barrel that hit the plaintiff fell due to the negligence of one of the
workers\" ? The materials provided the judges with one of four
probability ranges to select: 0-25%, 26-50%, 51-75%, or 76-100%.

When presented with a problem like this one, most people commit the
inverse fallacy and assume the likelihood that the defendant was
negligent is 90%, or at least a high percentage. \[FN146\] (Indeed, the
inverse fallacy might account for a logical flaw in the doctrine of res
ipsa loquitur first noted by Professor David Kaye, which we describe
below.) \[FN147\] In fact, however, the actual probability that the
defendant **\*809** was negligent is only 8.3%. To explain, we describe
the conditional probabilities of the four possible outcomes, given the
hypothetical facts we provided, in Table 3, below:

Table 3: Conditional Probabilities for Res Ipsa Loquitur Problem

Event Total

Injury No Injury

Actual Negligent 0.090% 0.010% 0.10%

Condition Not Negligent 0.999% 98.901% 99.90%

Total 1.089% 98.911% 100%

Because the defendant is negligent .1% of the time and is 90% likely to
cause an injury under these circumstances, the probability that a victim
would be injured by the defendant\'s negligence is .09% (and the
probability that the defendant is negligent but causes no injury is
.01%). Because the defendant is not negligent 99.9% of the time and is
1% likely to cause an injury under these circumstances, the probability
that on any given occasion a victim would be injured even though the
defendant took reasonable care is 0.999% (and the probability that the
defendant is not negligent and causes no injury is 98.901%). As a
result, the conditional probability that the defendant is negligent
given that the plaintiff is injured equals .090% divided by 1.089%, or
8.3%.

2\. Representativeness Heuristic: Results

Of the 159 judges who responded to the question, \[FN148\] 40.9%
selected the right answer by choosing 0-25%; 8.8% indicated 26-50%;
10.1% indicated 51- 75%; and 40.3% indicated 76-100%. Overall, the
judges did well; more than 40% of them got the correct answer to a
difficult question in a short period of time. Those judges who did not
get the correct answer, however, exhibited a significant tendency to
choose the highest range. \[FN149\] Although we did not inquire into the
reasoning process that led these judges to their answers, the number of
judges who chose the highest range suggests that many committed
**\*810** the inverse fallacy. In fact, roughly as many judges gave the
right answer as gave the answer suggested by the inverse fallacy.

3\. Representativeness Heuristic: Discussion

When presented with problems like this one, most expert decision makers
over-rely on the representativeness heuristic and commit the inverse
fallacy. \[FN150\] The judges in our sample, by contrast, were
impressive. Roughly 40% of the judges answered this difficult
evidentiary question correctly. At the same time, however, roughly 60%
of the judges answered incorrectly, and two-third of those (40% of the
total) selected the erroneous answer that reliance on the
representativeness heuristic would suggest is correct. Thus, although
the judges in our sample performed better than other previously studied
groups, 40% of the judges fell into the trap that the representativeness
heuristic creates.

Overreliance on the representativeness heuristic explains some important
quirks in judicial behavior and legal doctrine. For example, the
representativeness heuristic might account for judges\' apparent
preference for individuating evidence (e.g., eyewitness testimony) over
statistical evidence (e.g., base rates). \[FN151\] Case law is replete
with expressions of this preference. In one famous case, for example, a
plaintiff who was unable to identify the defendant\'s bus directly tried
to rely on statistical evidence that the defendant owned the bus that
injured her. \[FN152\] Despite the evidentiary value of the plaintiff\'s
base-rate evidence, the Supreme Judicial Court of Massachusetts refused
to allow the plaintiff to rely solely on that evidence to prove that the
defendant\'s bus was responsible for her injuries. \[FN153\] Although
other valid policy reasons might also support this preference, \[FN154\]
our study suggests that this preference may simply be the result of a
cognitive illusion.

The representativeness heuristic has also led judges to create erroneous
legal doctrine. As Professor Kaye has noted, the doctrine of res ipsa
loquitur (upon which the problem in our questionnaire is based)
historically includes a radical misunderstanding of probability
**\*811** theory. \[FN155\] According to the Restatement (Second) of
Torts, a jury can infer that the defendant is negligent from the
occurrence of an event that is \"of a kind which ordinarily does not
occur in the absence of negligence.\" \[FN156\] This inference owes its
superficial appeal to the representativeness heuristic. \[FN157\] Even
if an event does not ordinarily occur when negligence is absent, the
event still may be more likely to be the product of non-negligence than
negligence. In the problem that we used in this study, for example, the
accident was unlikely to occur when the defendant was not negligent.
Nevertheless, because negligence was rare, the event was still unlikely
to have been caused by negligence. Although the most recent version of
the Restatement (Third) of Products Liability and drafts of the
Restatement (Third) of Torts both remedy this logical error, \[FN158\]
it has lingered in the courts for over a century. We submit that the
error owes its existence to the failure to attend to base-rate
statistics.

E. Egocentric Biases

People tend to make judgments about themselves and their abilities that
are \"egocentric\" or \"self-serving.\" \[FN159\] People routinely
estimate, for example, that they are above average on a variety of
desirable characteristics, including health, \[FN160\] driving,
\[FN161\] professional **\*812** skills, \[FN162\] and likelihood of
having a successful marriage. \[FN163\] Moreover, people overestimate
their contribution to joint activities. For example, after a
conversation both parties will estimate that they spoke more than half
the time. \[FN164\] Similarly, when married couples are asked to
estimate the percentage of household tasks they perform, their estimates
typically add up to more than 100%. \[FN165\]

Egocentric biases occur for several reasons. First, of course, is
self-presentation. \[FN166\] People may not really believe that they are
better than average, but they will nonetheless tell researchers that
they are. \[FN167\] Second, people engage in confirmatory mental
searches for evidence that supports a theory they want to believe, such
as that their marriage will succeed. \[FN168\] They have no comparable
data on the nature of strangers\' marriages, so the only evidence they
find suggests that theirs is more likely than others\' to be successful.
\[FN169\] Third, memory is egocentric in that people remember their own
actions better than others\' actions. \[FN170\] Thus, when asked to
recall the percentage of housework they perform, people remember their
own contribution more easily and, consequently tend to overestimate it.
\[FN171\] Finally, many of the constructs involved in egocentric biases
are ambiguous, and thus, people can define success differently.
\[FN172\] For example, safe driving means different things to different
people, and as a result, everyone really can drive safer than average,
at least as measured by their own standards. \[FN173\]

Egocentric biases can be adaptive, but they can also have an unfortunate
influence on the litigation process. \[FN174\] Due to egocentric biases,
litigants and their lawyers might overestimate their own abilities,
**\*813** the quality of their advocacy, and the relative merits of
their cases. \[FN175\] These views, in turn, are likely to undermine
settlement efforts. In one study, for example, Professor George
Loewenstein and his colleagues asked undergraduates and law students to
assess the value of a tort case in which the plaintiff had sued the
defendant for \$100,000 in damages arising from an automobile-motorcycle
collision. \[FN176\] These researchers assigned some participants to
play the role of plaintiff and others the role of defendant, but they
provided both sets of participants with identical information about the
case. \[FN177\] Nevertheless, the participants interpreted the facts in
self-serving ways. When asked to predict the amount they thought the
judge would award in the case, the participants evaluating the case from
the perspective of the plaintiff predicted that the judge would award
\$14,527 more than the defendant-participants predicted. \[FN178\] When
asked to identify what they perceived to be a fair settlement value,
plaintiff-participants selected a value \$17,709 higher than the value
selected by defendant-participants. \[FN179\] These results suggest that
self-serving or egocentric biases can lead to bargaining impasse and
wasteful litigation.

Like litigants and lawyers, judges might also be inclined to interpret
information in self-serving or egocentric ways. Egocentric biases could
lead judges to believe that they are better decision makers than is
really the case.

1\. Egocentric Biases: Our Materials

To test whether judges are prone to egocentric biases, we asked the
judges participating in our study to respond to a simple question. In an
item labeled \"Appeal Rates,\" we asked the judges to estimate their
reversal rates on appeal: \"United States magistrate judges are rarely
overturned on appeal, but it does occur. If we were to rank all of the
magistrate judges currently in this room according to the rate at which
their decisions have been overturned during their careers, \[what\]
would your rate be\" ? We then asked the judges to place themselves into
the quartile corresponding to their respective reversal rates: highest
(i.e., \>75%), second-highest (\>50%), third-highest **\*814** (\>25%),
or lowest (\<25%). The materials explained the meaning of each quartile
in careful detail. \[FN180\]

2\. Egocentric Biases: Results

In their responses to the questionnaire, the judges exhibited an
egocentric bias. Of the 155 judges who responded to this question,
\[FN181\] 56.1% reported that their appeal rate placed them in the
lowest quartile; 31.6% placed themselves in the second-lowest quartile;
7.7% in the second-highest quartile, and 4.5% in the highest quartile.
In other words, 87.7% of the judges believed that at least half of their
peers had higher reversal rates on appeal. This pattern of results
differs significantly from what one would expect if judges were
unbiased. \[FN182\]

It is possible that the 56.1% of the judges who placed themselves in the
lowest quartile have never been overturned on appeal, which suggests
that they really do belong in the lowest quartile. In fact, several
judges indicated that they had never been reversed. If so, however, the
31.6% of judges who placed themselves in the next lowest quartile were
wrong, and in any event, it is impossible for only 4.5% of the judges to
be in the highest quartile. Even if the 56.1% of the judges in the
lowest quartile had never been overturned on appeal, and hence were
being as accurate as possible, the remaining 43.9% of the judges
exhibited a significant egocentric bias. \[FN183\]

3\. Egocentric Biases: Discussion

The judges in our study exhibited a strong egocentric bias concerning
the likelihood that they would be overturned on appeal. The results do
not, however, reveal whether the judges truly believed their egocentric
answers or were simply unwilling to admit that they had high reversal
rates. Given that the judges knew that their responses were anonymous,
they had little reason to hide their true beliefs. Furthermore, the
results of similar studies of egocentric biases indicate that although
self-presentation effects explain some of the results, most people
genuinely believe that they are better than average at a variety of
endeavors. \[FN184\] Also, our results are similar to those found in
**\*815** a study of bankruptcy judges conducted by Professor Theodore
Eisenberg. \[FN185\] Eisenberg\'s study showed that bankruptcy judges
expressed substantially different beliefs than the attorneys who
appeared before them, even as to seemingly objective matters, such as
whether judges grant interim fee applications. \[FN186\] Also, the
bankruptcy judges in Eisenberg\'s study overestimated the degree to
which the lawyers who appear in front of them feel fairly treated.
\[FN187\]

Egocentric biases might prevent judges from maintaining an awareness of
their limitations; in turn, this might work to the detriment of
litigants appearing in their courtrooms. For example, a federal district
judge can grant an interlocutory appeal only if she is willing to
concede that she has issued a ruling on a matter of law \"as to which
there is substantial ground for difference of opinion.\" \[FN188\] Thus,
a litigant seeking to persuade a judge to grant an interlocutory appeal
must convince her that another judge could easily disagree with her
ruling. Similarly, prisoners seeking an appeal from a federal district
court\'s denial of a petition for writ of habeas corpus must first seek
a certificate of appealability from the same court that rejected the
claim. \[FN189\] Obtaining the certificate of appealability requires
that the prisoner demonstrate to a judge that he or she denied a claim
in a way that \"reasonable jurists would find . . . debatable or
wrong.\" \[FN190\] The influence of the egocentric bias likely makes it
difficult for litigants to convince federal judges that they might have
been wrong.

Finally, egocentric biases might make it unlikely that judges will grant
requests to set aside judgments in both civil and criminal cases.
\[FN191\] Even in a jury trial, egocentric biases might lead the judge
to react too skeptically to the suggestion that the trial over which he
presided produced an erroneous result. More generally, egocentric biases
may make it hard for judges to recognize that they can and do make
mistakes.

At the same time, egocentric biases can be beneficial. Psychologists
argue that having a somewhat inflated belief in one\'s abilities helps
maintain one\'s morale and ensures a healthy sense of well-being.
\[FN192\] Also, society surely prefers its judges to be resolute and
self-assured rather than timid and insecure. Egocentric beliefs may
induce **\*816** judges to see the world in a self-serving fashion, but
the justice system may ultimately be better off because of it.

F. Cognitive Illusions in Judges and Other Decision Makers

Our study indicates that judicial decision making, like the decision
making of other experts and laypeople, is influenced by the cognitive
illusions we tested. But do these cognitive illusions influence judges
as much as they influence other decision makers? It is difficult to
answer this question accurately, because different studies use different
materials and methodologies. Nevertheless, in Table 4, below, we compare
our results to the results of studies of other decision makers.
\[FN193\]

Table 4: Judges as Compared to Other Decision Makers

TABULAR OR GRAPHIC MATERIAL SET FORTH AT THIS POINT IS NOT DISPLAYABLE

Table 4 shows that the judges in our study appear to be just as
susceptible as other decision makers to three of the cognitive illusions
we tested: anchoring, hindsight bias, and egocentric bias. Though still
susceptible to framing and the representativeness heuristic, the judges
appear less susceptible than other decision makers to these effects. We
consider each below.

Judges in our study proved susceptible to anchoring effects, as have
laypersons in mock-jury studies. Direct comparisons between the size of
the effect of the anchor are difficult because our materials differed
substantially from those used in the mock-jury studies. In particular,
most mock-jury studies have used anchors that are higher than the
expected awards in the absence of an anchor, while we used an anchor
that was lower than the expected awards in the absence of an anchor.
Also, the source of the anchor in most mock-jury studies is a damage
request from the plaintiff\'s lawyer, while we used the jurisdictional
limit for diversity suits in federal court. The only study to compare a
low anchor with a condition without any anchor found that the anchor
reduced mean awards from \$167,812 to \$90,333. \[FN194\] Although the
percentage reduction in mean awards in that study of mock jurors
exceeded the one we found in our study of judges (46% versus 29%), we
found a greater mean reduction in absolute dollars (roughly \$77,000
versus \$368,000).

In comparable studies of framing effects, researchers have found much
larger differences in settlement rates between subjects in the
gains-frame condition and subjects in the losses-frame condition. The
judges in our study were fifteen percentage points more inclined to say
that plaintiff rather than defendant should settle, while other studies
using student subjects have found fourteen to fifty-one
percentage-**\*817** point differences between subjects in the two
conditions. \[FN195\] In the prior study most similar to ours, Jeffrey
Rachlinski gave law student subjects a hypothetical copyright scenario
and found a forty-six percentage-point difference in settlement rates
between plaintiff and defendant subjects, \[FN196\] a much larger effect
than we observed in our study. Although the stakes in Rachlinski\'s
study were higher (\$400,000 as opposed to \$200,000) and the overall
settlement rate differed (54% in Rachlinski\'s study versus 68% in our
study), the difference between the results of the two studies suggests
that judges are less susceptible to framing effects. This conclusion is
consistent with **\*818** previous studies indicating that experienced
lawyers are less susceptible to the influence of framing. \[FN197\]

The judges in our study exhibited hindsight bias to the same extent as
mock jurors and other laypersons. Our study differs from most studies of
the hindsight bias because we asked the judges to choose among three
options rather than to assign specific probability estimates. In a
statistical review of studies of the hindsight bias in circumstances
similar to legal judgments, researchers found that the hindsight bias
alters the decisions of 27% of the subjects. \[FN198\] This approximates
our finding that 24% of the judges in our study made a different choice
because of the hindsight bias. \[FN199\] Our result is also within the
range of shifts observed in previous mock-jury studies of the hindsight
bias. \[FN200\] Finally, the hindsight bias is one of two illusions we
tested that previous researchers have tested on judges, and our results
are consistent with the findings of this prior research. \[FN201\]

The judges in our study were much more attentive than other experts to
base-rate statistics and were much less likely to make decisions based
solely on the representativeness of the evidence. Our materials differed
somewhat from previous studies in that we asked the judges to select one
of four answers rather than to provide a specific probability estimate.
Nevertheless, in a comparable study, only 18% of doctors\--as compared
to 40% of the judges in our study\--provided the correct answer to a
problem like ours. \[FN202\]

Finally, the judges in our study exhibited egocentric biases comparable
to those exhibited by subjects in other similar studies. \[FN203\] In
our study, 87.7% of the judges rated themselves as less likely to be
overturned than the average judge. Judges in our sample were only
slightly more modest than university faculty\--94% of whom rated
themselves as better than average teachers. \[FN204\]

**\*819** G. Do These Findings Apply to Judges in the Courtroom?

Our study shows that judges rely on cognitive processes that are likely
to induce them to make systematic errors, but it does not conclusively
demonstrate that judges actually make such errors in the courtroom. The
decisions that judges made in response to our materials differ from the
decisions that they make in their courtrooms in several important ways.
In the courtroom, judges must make decisions based on more detailed and
complicated records, are more highly motivated to make accurate
judgments, and have more time and resources to devote to the decision.
Many cases also doubtless turn on issues less subject to the effects of
cognitive illusions. Others are so straightforward that cognitive
illusions should not influence the outcome. These differences suggest
that we should be cautious in interpreting our results.

Nevertheless, it is likely that the results of our study have some
application to decisions made outside the laboratory. In our study, we
employed standard cognitive psychological research methods, which have
proven enormously successful in identifying decision-making strategies
that people use in making real decisions. \[FN205\] The basic
methodology of cognitive psychologists\--whether they study memory,
visual perception, or judgment\--is to tax people\'s cognitive
abilities, to determine their successes and failures, and then to infer
how people think based on their responses under these conditions.
\[FN206\] These methods frequently demonstrate that people make
predictable errors, thereby revealing their thought processes.

To the extent that the methods used in this study have identified
thought processes that judges use, the conclusions apply in the
courtroom. After all, increased motivation and incentives \"do not
operate by magic: they work by focusing attention and by prolonging
deliberation.\" \[FN207\] Only if increased attention and greater
deliberation enable judges to abandon the heuristics that they are
otherwise inclined to rely upon can they avoid the illusions of judgment
that these heuristics produce. This does not seem likely. \"The
corrective power of incentives **\*820** depends on the nature of the
particular error and cannot be taken for granted.\" \[FN208\]

Similarly, the greater detail that judges face in actual cases does not
by itself reduce the effects of cognitive illusions. The materials used
in our study, and in most cognitive psychological research on human
judgment, are intentionally simple. They are designed to isolate a
particular pattern of thought. Factors other than any single cognitive
illusion can influence the decision made in a more complicated case, but
there is no guarantee that these other influences will swamp the
illusion so dramatically that the illusion\'s influence will be
negligible. In fact, details actually feed into some cognitive
illusions, including the hindsight bias, and these illusions grow more
powerful as the materials upon which they are based become more
detailed. \[FN209\]

Greater resources also provide no guaranteed protection against the
influence of cognitive illusions. Judges obviously can use the resources
they have to obtain better research and background information to inform
their decisions, but their time and resources are not infinite. Even
with greater resources, judges will still resort to cognitive shortcuts.
If judges are unaware of the cognitive illusions that reliance on
heuristics produces, then extra time and resources will be of no help.
Judges will believe that their decisions are sound and choose not to
spend the extra time and effort needed to make a judgment that is not
influenced by cognitive illusions.

Perhaps the best support for the conclusion that susceptibility to
cognitive illusions will persist in the face of high motivation and
great detail are the results of those studies showing that cognitive
illusions adversely affect the quality of decisions made in the real
world. In one striking example, researchers demonstrated that framing
effects persist among poor people even when the stakes consist of
two-months\' salary. \[FN210\] Furthermore, several studies show that
framing effects and egocentric biases influence decisions when the
stakes are high; for example, framing effects and egocentric biases
influence lawyers\' assessments of actual lawsuits. \[FN211\] Similarly,
numerous case studies reveal the influence of the hindsight bias on
expert evaluations of the causes of accidents. \[FN212\]

**\*821** Most importantly, published judicial opinions include examples
of the influence of cognitive illusions. As noted above, the judge-made
res ipsa loquitur doctrine appears to be a product of overreliance on
the representativeness heuristic. The judges in cases such as Byrne v.
Boadle surely were motivated to reach the right answer and probably had
the benefit of a detailed record. Nevertheless, these judges, along with
generations of other judges in a multitude of other cases involving res
ipsa loquitur (as well as the American Law Institute in its Restatement
of the Law of Torts) cemented this error into the common law for over a
century. Similarly, judges applying the prudent-investor rule to cases
of trustee liability seem also to have fallen prey to the hindsight
bias. \[FN213\] These examples suggest that the motivation, detail, and
resources that judges have available in deciding cases do not
necessarily enable them to avoid the effects of cognitive illusions.

In our study, we included items designed to identify patterns of choices
that would reveal whether judges rely on thought processes that create
cognitive illusions. The judges\' answers to our questions were not the
random \"noise\" that one might expect if judges were not attending
carefully to the questions. Rather, the answers confirmed predictions
derived from psychological research on judgment and decision making. In
the course of making decisions in the courtroom, judges certainly face
more complex fact patterns, have more motivation to make good decisions,
have more time to make decisions, and receive assistance from litigants,
lawyers, and clerks. But unless these factors alter the fundamental ways
judges think, they will not eliminate the effects of cognitive
illusions.

III General Discussion and Implications

Judges, it seems, are human. \[FN214\] Like the rest of us, they use
heuristics that can produce systematic errors in judgment. Unlike the
rest of us, however, judges\' judgments can compromise the quality of
justice that the courts deliver. What can the legal system do to avoid
or minimize the effects of cognitive illusions? There is no single,
simple answer to this question. We discuss three potential remedies
below. First, judges might learn to educate themselves about cognitive
illusions so that they can try to avoid the errors that these illusions
tend to produce. Second, the legal system might consider reallocating
decision-making power between judges and juries as a means of reducing
the effects of cognitive illusions. Third, judges and legislators
**\*822** might craft legal rules that minimize the adverse effects that
cognitive illusions can have on judgment.

A. Improving Judges\' Judgment

The heuristics that create cognitive illusions are deeply ingrained and
are often useful decision aids, so it would be difficult for judges to
refrain from using them. Nevertheless, judges can (and, we argue, often
do) make good decisions by learning to adopt multiple perspectives on
the problems confronting them, restricting their use of heuristics to
normatively appropriate circumstances, and distrusting inclinations that
are likely to be the product of cognitive illusions.

1\. Adopting Multiple Perspectives

Judges may be able to reduce the effect of some cognitive illusions by
approaching decisions from multiple perspectives. For example, the
undesirable consequences of framing, which generally consist of making
choices that are too risky when faced only with potential losses, can be
overcome by recognizing that decisions can often be characterized either
as gains or as losses. \[FN215\] In the copyright dispute we described
above, for example, the defendant appeared to face a choice between a
50% chance of losing \$200,000 at trial (plus \$50,000 in attorneys\'
fees) and a certain \$140,000 loss (in the form of a settlement). The
choice of whether to pay the \$140,000 settlement, however, could be
re-characterized as a \$10,000 gain over the expected loss of \$150,000.
\[FN216\] Alternatively, the defendant could recognize that it would
still realize \$60,000 in revenue on its alleged use of the
copyright-protected materials if it accepted the settlement. Considering
a decision from different perspectives does not necessarily eliminate
the effects of decision frames, but it can reveal to the decision maker
the arbitrary nature of a frame\'s influence.

In their roles as case managers or settlement brokers, judges are in a
unique position to re-frame settlement decisions for the parties because
they have no stake in the outcome. Indeed, one possible reason that
framing effects influenced the settlement preferences of the judges in
our study to a lesser extent than other populations might be that judges
learn to consider a case from multiple frames. Because **\*823** judges
will generally hear both sides of a dispute before (and during) the time
they act as mediators, the judges will have access to each side\'s
perspective. This makes it easier for the judge to see the case through
each potential frame.

Judges can, and should, make a conscious effort to re-frame decisions
that seem like losses because parties facing losses often undertake
undesirably risky (and costly) litigation strategies, such as rejecting
risk-neutral settlement offers. \[FN217\] As they gain experience with
settlement negotiations, many judges likely learn that recharacterizing
decision options can convince a litigant to abandon an economically
wasteful preference for trial. Judges should be taught these techniques
during their orientation or as part of other training programs.

2\. Limiting Heuristics to Normatively Appropriate Circumstances

Judges can also try to limit the use of heuristics to normatively
appropriate circumstances. For example, many anchors convey useful
information, so anchoring often improves the quality of a decision.
Meaningless anchors, however, lead people astray. As experienced
decision makers with some control over the information presented to
them, judges can limit their exposure to certain anchors. Judges should
be wary of simply relying on anchors supplied by litigants, such as a
plaintiff\'s lawyer\'s damage request, or other anchors unconnected to
the true value of the case, such as a statutory damage cap. Instead,
judges should use more reliable numerical reference points, such as a
composite of damage awards in similar cases.

In our study, for example, judges who declined to provide a damage
estimate in response to the anchoring question frequently expressed
their frustration at the lack of reliable numerical anchors in the
problem. Several judges asserted that they could not answer without
knowing the plaintiff\'s age and annual salary. In effect, these judges
were searching for a reliable anchor. In our study, we deliberately
withheld any additional numbers that could be used as anchors, so as to
isolate the effect of the one anchor that we did provide. In an actual
case, several useful anchors (as well as other information) are
available to the judge.

Similarly, although the representativeness heuristic is frequently a
useful guide to evaluating evidence, it can lead people astray when
relevant background statistics are available. For example, judges should
regard a litigant\'s efforts to prove that a highly unlikely event
occurred with great suspicion. A rare event (such as the accident in
**\*824** our res ipsa loquitur problem) is more likely to be the
extraordinary product of a common cause (non-negligence) than the
ordinary product of an extraordinary cause (negligence). Rare events
should not be attributed to extraordinary causes without powerful
evidence. \[FN218\]

The fact that the judges in our study performed better than other
experts on the res ipsa loquitur problem suggests that judicial
experience might curb undue reliance on the representativeness
heuristic. Although scholars frequently criticize judges for failing to
evaluate statistical evidence properly, \[FN219\] judges have a wealth
of experience evaluating the probative value of evidence. This
experience may have led the judges in our study to distrust their
inclination to rely on the similarity between the evidence and the
hypothesis it allegedly supports. We doubt, for example, that judges are
as swayed by potentially misleading evidence, such as the apparent
nervousness of a criminal defendant, as juries, because judges have
encountered countless nervous defendants in their courtroom. Just as
experience teaches judges how to evaluate evidence appropriately, this
skill can also be taught to new judges.

3\. Reducing Reliance on Tainted Judgments

Finally, judges can avoid relying on judgments that are especially prone
to distortion by cognitive illusions. Among the five illusions we
tested, the egocentric bias and the hindsight bias are essentially
impossible to avoid. Egocentric beliefs are closely connected to good
mental health, especially in instances where those abilities are
important to one\'s personal or professional life. \[FN220\] Inflated
beliefs in one\'s personal and professional abilities allow people to
enjoy a high sense of self-esteem; in fact, only people who are
depressed appear to possess an accurate portrait of their abilities.
\[FN221\] Not only would it be difficult for judges to learn to avoid
egocentric biases, it might be inadvisable for them to try. On balance,
the social benefits of having confident, decisive judges likely outweigh
the costs associated with an occasional erroneous decision caused by
such self-assurance.

Nevertheless, judges should temper their confidence in their abilities.
In circumstances that require judges to determine how sure they are of
their decisions (such as whether to certify an issue for interlocutory
appeal or to issue a certificate of appealability in a prisoners\'
**\*825** rights case), judges should proceed with caution and search
for independent sources of judgment, if possible. \[FN222\] For example,
local rules could be adjusted to encourage or require judges to assign a
request for a certificate of appealability to a different judge, even
though this would be much less efficient than allowing the same judge
who made the underlying decision to rule on it.

The hindsight bias poses the most troublesome problem for judges.
Learning the outcome has such profound and subtle effects on people\'s
beliefs that re-creating a past prediction is like trying to cross the
same river twice\--upon learning the outcome the brain has developed a
new set of beliefs and can never really return to its previous state.
Unfortunately, understanding the hindsight bias does nothing to reduce
its influence; \[FN223\] neither does instructing subjects to be careful
to avoid its effects. \[FN224\] The judges in our study revealed a
strong hindsight bias. Previous research suggests that correcting for
the bias is not feasible. \[FN225\]

When confronted with judgments likely to be affected by the hindsight
bias, judges should distrust their intuitive assessments of what parties
could have predicted. Instead, they should rely on ex ante standards of
conduct, if available. For example, a defendant\'s nonconformity or
conformity with a regulatory safety standard might be better evidence of
the defendant\'s negligence or non-negligence than an intuitive sense of
whether a defendant seemed to have behaved reasonably or not. Legal
reforms that would promote judgments based on ex ante standards should
also be considered and are discussed below.

4\. A Note on Judicial Specialization

In addition to the general strategies described above, judicial decision
making might also benefit from specialization on the bench. Suppose, for
example, that some judges functioned solely as adjudicators, while
others functioned solely as case managers. The full-time trial judges
should develop a better sense of when the representativeness heuristic
leads them astray than judges who conduct trials only part of the time.
Similarly, the full-time managerial judges should become more adept at
helping litigants to avoid framing effects than judges who occasionally
supervise settlement conferences. Greater experience, **\*826**
training, and specialization should enable judges to make better
decisions.

B. Juries Versus Judges

Reformers commonly propose that the legal system should rely more
heavily on judges than juries as a means of reducing the influence of
cognitive errors in the courtroom. \[FN226\] Recent years, in fact, have
witnessed increasing distrust of juries and numerous efforts to curb
their authority. \[FN227\] Although previous research has shown that
cognitive illusions influence juries, \[FN228\] the results of our study
suggest that choosing the optimal decision maker requires a comparison
of the relative strengths and weaknesses of judges and juries. \[FN229\]

Even though the results of our study demonstrate that relying on judges
would not cure all of the problems that cognitive illusions create for
the justice system, our study provides insight into when judges are more
likely than juries to make unbiased decisions (and vice versa). Judges
are likely to be better decision makers in circumstances where
decision-making experience can blunt the effects of cognitive illusions.
For example, even though our results suggest that judges rely on anchors
as much as juries do, judges might avoid some of the unwanted effects of
anchoring if they are aware of awards in comparable cases and can use
this information as a source of anchors. Although anchors from similar
cases might be somewhat inaccurate, at least they are not provided by
litigants. In contrast to judges, jurors are less likely to have
comparable information at their disposal and may be more susceptible to
partisan anchors, such as damage requests made by plaintiffs\'
attorneys.

Judges are also in a better position to determine whether evidence is
relevant. Relevance is largely a statistical concept that is easily
misunderstood. Judges are less likely than jurors to rely on heuristics
like representativeness that can lead to erroneous evidentiary
determinations. Suppose, for instance, that a prosecutor wanted to
introduce testimony that carpet fibers from a criminal defendant\'s home
matched carpet fibers found at a crime scene. Further suppose that the
forensic test used to make the match also finds that the carpet fiber
found at the crime scene is extremely common and would match **\*827**
carpet fibers in 90% of the homes in the United States. The testimony
that the fibers match is of almost no relevance to the defendant\'s
guilt. Experienced judges are unlikely to admit such evidence or to give
it much weight. Jurors encountering this information for the first time,
however, are more likely to perceive the evidence as relevant.

Although our results support greater reliance on judges in circumstances
where experience and training can facilitate avoidance of cognitive
illusions, they also identify important advantages juries have over
judges. Juries consist of groups, and group deliberation might reduce
some illusions of judgment. \[FN230\] Consider, for example, the
hindsight bias, which is virtually impossible to purge from legal
decision making and influences both jurors and experienced judges alike.
Part of the reason the hindsight bias occurs is that learning the
outcome alters people\'s memories of the preceding events; people
remember more information that is consistent with the known outcome than
is inconsistent with the known outcome. \[FN231\] Because groups usually
remember more of the relevant facts than individuals, group decision
making can mitigate some of the hindsight bias\'s influence, suggesting
that juries might more successfully avoid the hindsight bias than
judges.

Another important advantage of a jury trial is that it creates a
mechanism for keeping potentially misleading information away from the
fact finder. A judge will always know about subsequent remedial measures
and statutory damage caps, whereas this information can be kept from
juries. Generally, when the only means of avoiding the effect of a
cognitive illusion is to restrict access to the information that
triggers it, a jury trial has a substantial advantage over a bench
trial.

On balance, then, our results suggest that those clamoring for judges to
replace juries should proceed with caution. Judges are likely to make
better decisions in certain circumstances because their training and
experience will enable them to avoid the more pernicious effects of such
cognitive decision-making phenomena as the representativeness heuristic.
On the other hand, group decision making or the insulation afforded by a
judicial gatekeeper may enable juries to make better decisions than
judges in other circumstances.

**\*828** C. Legal Rules That Avoid Illusions of Judgment

The legal system might also adopt procedural, evidentiary, and even
substantive rules to minimize the deleterious effects of cognitive
illusions on judicial decision making. By adopting such rules, the
system can avoid placing judges in a position in which cognitive
illusions are likely to lead them astray. It is much easier to avoid
stepping on a patch of ice than it is to keep your footing once you have
stepped on it. Indeed, some legal rules appear to represent an effort by
judges or legislators to avoid the effects of these illusions of
judgment. \[FN232\]

For example, Rule 407 of the Federal Rules of Evidence represents an
adaptation to the effects of the hindsight bias. \[FN233\] By excluding
from evidence subsequent remedial measures taken by the defendant, Rule
407 precludes the fact finder from taking this information into
consideration when assessing ex post whether the defendant behaved
reasonably at the time of the accident. Similarly, courts often rely on
ex ante standards of conduct rather than ex post determinations of
\"reasonableness\" as a means of reducing the hindsight bias. \[FN234\]
In medical malpractice cases, for instance, courts are asked not to make
ex post determinations about whether the defendant behaved
\"reasonably.\" Instead, they are charged with inquiring into whether
the defendant behaved in a manner consistent with customary practices
established ex ante by the medical profession. \[FN235\] Similarly, in
corporate law, courts refuse to hold officers and directors of
corporations liable for negligent business decisions because these
decisions, though seemingly wise in foresight, may seem foolish in
hindsight. \[FN236\]

Several legal rules also arguably reflect efforts to temper the effects
of egocentric biases. Egocentric biases lead people to be more confident
in their decisions than is normatively appropriate. People influenced by
egocentric biases might make more extreme decisions than are warranted
by the available information. For example, judges and juries might be so
confident in their verdicts that they are willing to impose severe
penalties (including death) or award extremely high damages, even in
cases in which the facts are too uncertain to support such extreme
decisions. The availability of multiple judicial appeals might be an
effort to counteract the potentially overconfident assignment of the
death penalty; the availability of this review reflects, at the very
least, a recognition that the trial process can make mistakes, even
**\*829** when the decision maker is sure enough of the facts to
sentence someone to death. Likewise, damage caps might reflect a
systematic effort to temper overconfident civil verdicts. Political
concerns support both the availability of multiple appeals in
death-penalty cases and damage caps in civil cases, but each might also
reflect conscious or subconscious efforts to combat the consequences of
egocentric biases in the trial courts.

There is some danger that adopting reforms to reduce the effects of a
single cognitive illusion will skew the litigation process because any
single reform will fail to reduce the effects of other illusions.
Furthermore, efforts to curb the effects of a single illusion might have
an adverse effect on one category of litigants. For example, the
hindsight bias generally benefits tort plaintiffs because it makes it
seem as if the defendant had a greater ability to predict the adverse
outcome than was actually true. Similarly, anchoring makes it easier for
plaintiffs to obtain higher damage awards, because defendants typically
cannot provide an anchor without implicitly admitting that they should
be held liable. If the legal system reforms these illusions without
remedying others that benefit defendants, then the reforms will skew the
system against plaintiffs. Nevertheless, failing to adopt reforms that
reduce the effect of cognitive illusions also skews the system and
ensures that the system produces more errors than it otherwise might.

Conclusion

\"The aim of the American legal system is liberty and justice for all.
How close we come to that aim depends on good judging.\" \[FN237\] We
are confident that most judges attempt to \"reach their decisions
utilizing facts, evidence, and highly constrained legal criteria, while
putting aside personal biases, attitudes, emotions, and other
individuating factors.\" \[FN238\] Despite their best efforts, however,
judges are vulnerable to the influence of the cognitive illusions that
we have described in this Article.

Our study demonstrates that judges rely on the same cognitive
decision-making process as laypersons and other experts, which leaves
them vulnerable to cognitive illusions that can produce poor judgments.
Even if judges have no bias or prejudice against either litigant, fully
understand the relevant law, and know all of the relevant facts, they
might still make systematically erroneous decisions under some
circumstances simply because of how they\--like all human
beings\--think.

**\*830** All is not bleak, however, because judges, litigants, and
legislators can take steps to minimize the effects of these cognitive
illusions. Nevertheless, these illusions will persist. Additional
psychological and legal scholarship is needed to explore the various
ways that the cognitive processes of legal actors can and should
influence the administration of justice. A greater understanding of
these cognitive processes can only improve the legal system, whereas
ignorance can only undermine it. As Judge Jerome Frank put it:

To the extent that one goes to sleep in a dream of attainable
perfection, he becomes the victim of uncertainties which he ignores and
for which he therefore fails to allow. The courageous attitude of
accepting uncertainties makes one\'s world picture more complex; life is
disclosed as far more precarious and difficult to conciliate. But, just
in proportion as we learn more about what was previously undetected, we
reduce the dangers of being crushed by unobserved dangers. That is the
paradox of wisdom: Insofar as we become mindful that life must be less
perfect than we would like it to be, we approach nearer to perfection.
\[FN239\]

\[FNd1\]. Acting Associate Dean, Associate Professor of Law & Senior
Fellow at the Center for the Study of Dispute Resolution, University of
Missouri School of Law. B.A. 1989, Stanford University; Ed.M. 1991,
Harvard University; J.D. 1994, Stanford University.

\[FNdd1\]. Professor of Law, Cornell Law School. B.A. 1988, Johns
Hopkins University; M.A. (Psychology) 1988, Johns Hopkins University;
J.D. 1993, Stanford University; Ph.D. (Psychology) 1994, Stanford
University.

\[FNddd1\]. Magistrate Judge, United States District Court, Central
District of California. A.B. 1972, 1973, University of California at
Berkeley; J.D. 1976, University of Chicago.

The views expressed in this Article are solely those of the authors, and
not of the Federal Judicial Center, the Administrative Office of the
United States Courts, or the Judicial Conference of the United States.

We are deeply indebted to the magistrate judges who participated in our
study. This Article benefitted enormously from the following: The
comments of David Fischer, Tracey George, Russell Korobkin, Jennifer
Robbenolt, Lee Teitelbaum, and Tom Willging; participants in the
American Law and Economics Association 2000 Annual Meeting, the Federal
Judicial Center Workshop for United States Magistrate Judges I & II,
1999, the Canadian Law and Economics Association 2000 Annual Meeting,
and the Law & Society Association 2000 Annual Meeting; and workshops at
Columbia Law School, the University of San Diego School of Law,
Washington University School of Law, the Willamette College of Law, and
Yale Law School. We thank the University of Missouri Law School
Foundation and the Hewlett Foundation for financial support.

\[FN1\]. The Federalist No. 78, at 437 (Alexander Hamilton) (Isaac
Kramnick ed., 1987) (\"\[The judiciary\] may truly be said to have
neither force nor will but merely judgment; and must ultimately depend
upon the aid of the executive arm even for the efficacy of its
judgments.\") (typeface altered).

\[FN2\]. Judges now not only \"adjudicat\[e\] the merits of issues
presented to them by litigants\" but also \"meet\[ \] with parties in
chambers to encourage settlement of disputes and to supervise case
preparation.\" Judith Resnik, Managerial Judges, 96 Harv. L. Rev. 376,
376-77 (1982) \[hereinafter Resnik, Managerial Judges\]. See generally
Judith Resnik, Trial as Error, Jurisdiction as Injury: Transforming the
Meaning of Article III, 113 Harv. L. Rev. 924 (2000) (documenting the
changing role of the federal judiciary during the twentieth century).

\[FN3\]. See Robert E. Keeton, Keeton on Judging in the American Legal
System § 1.3.1 (1999) (noting that judges are obliged to make an
\"impartial application of principles\"). Several economic models of
adjudication demonstrate that substantive law can be implemented
effectively even if judges make random mistakes. See, e.g., Louis
Kaplow, The Value of Accuracy in Adjudication: An Economic Analysis, 23
J. Legal Stud. 307, 311-23, 345-55 (1994); Louis Kaplow & Steven
Shavell, Accuracy in the Determination of Liability, 37 J.L. & Econ. 1,
1-3 (1994); Eric A. Posner, A Theory of Contract Law Under Conditions of
Radical Judicial Error, 94 Nw. U. L. Rev. 749, 767-69 (2000). Systematic
errors, on the other hand, distort substantive law. See Richard A.
Posner, An Economic Approach to Legal Procedure and Judicial
Administration, 2 J. Legal Stud. 399, 406-08 (1973); Steven Shavell, The
Appeals Process as a Means of Error Correction, 24 J. Legal Stud. 379,
425- 26 (1995).

\[FN4\]. See generally Jerome Frank, Courts on Trial: Myth and Reality
in American Justice (1949) (documenting the legal realist position on
judging); Felix S. Cohen, Transcendental Nonsense and the Functional
Approach, 35 Colum. L. Rev. 809, 846 (1935) (suggesting that \"the
political, economic, and professional background and activities of our
various judges\" are the \"the motivating forces which mold legal
decisions\"). For a discussion of contemporary incarnations of legal
realism, see Edward L. Rubin, The New Legal Process, the Synthesis of
Discourse, and the Microanalysis of Institutions, 109 Harv. L. Rev. 1393
(1996).

\[FN5\]. See, e.g., Mark Kelman, A Guide to Critical Legal Studies 45-48
(1987).

\[FN6\]. See generally Martha Chamallas & Linda K. Kerber, Women,
Mothers, and the Law of Fright: A History, 88 Mich. L. Rev. 814, 862-64
(1990) (arguing that the fact that virtually all nineteenth-century
judges were men, while plaintiffs in certain types of cases were mostly
women, influenced the development of tort law); Gregory C. Sisk, Michael
Heise, & Andrew P. Morriss, Charting the Influences on the Judicial
Mind: An Empirical Study of Judicial Reasoning, 73 N.Y.U. L. Rev. 1377,
1385-88 (1998) (reviewing empirical research on race and gender biases
in judges); Cassia Spohn, The Sentencing Decisions of Black and White
Judges: Expected and Unexpected Similarities, 24 Law & Soc\'y Rev. 1197,
1198 (1990) (reviewing the critical race literature on judges).

\[FN7\]. See generally Jonathan R. Macey, Judicial Preferences, Public
Choice, and the Rules of Procedure, 23 J. Legal Stud. 627, 630-32 (1994)
(discussing the judiciary\'s \"bureaucratic preferences\"); Richard A.
Posner, What Do Judges and Justices Maximize? (The Same Thing Everybody
Else Does), 3 Sup. Ct. Econ. Rev. 1 (1993) (reviewing judges\' behavior
using a \"model in which judicial utility is a function mainly of
income, leisure, and judicial voting\"). See generally Lawrence Baum,
The Puzzle of Judicial Behavior (1997) (reviewing scholarship on
judicial behavior).

\[FN8\]. Amos Tversky & Daniel Kahneman, Judgment Under Uncertainty:
Heuristics and Biases, 185 Science 1124, 1124 (1974). For a detailed
description of this work, see Judgment Under Uncertainty: Heuristics and
Biases (Daniel Kahneman, Paul Slovic, & Amos Tversky eds., 1982); see
also Scott Plous, The Psychology of Judgment and Decision Making 109-30,
145-52 (1993).

\[FN9\]. Tversky & Kahneman, supra note 8, at 1124 (\"In general, these
heuristics are quite useful, but sometimes they lead to severe and
systematic errors.\").

\[FN10\]. Id.

\[FN11\]. Id.

\[FN12\]. See Robert J. MacCoun, Experimental Research on Jury
Decision-Making, 244 Science 1046 (1989) (reviewing research on juries).

\[FN13\]. See Reid Hastie, David A. Schkade, & John W. Payne, Juror
Judgments in Civil Cases: Hindsight Effects on Judgments of Liability
for Punitive Damages, 23 Law & Hum. Behav. 597, 609 (1999); Kim A. Kamin
& Jeffrey J. Rachlinski, Ex Post not= Ex Ante: Determining Liability in
Hindsight, 19 Law & Hum. Behav. 89, 99 (1995); Susan J. LaBine & Gary
LaBine, Determinations of Negligence and the Hindsight Bias, 20 Law &
Hum. Behav. 501, 510-12 (1996); Merrie Jo Stallard & Debra L.
Worthington, Reducing the Hindsight Bias Utilizing Attorney Closing
Arguments, 22 Law & Hum. Behav. 671, 680-81 (1998).

\[FN14\]. See Mark Kelman, Yuval Rottenstreich, & Amos Tversky,
Context-Dependence in Legal Decision Making, 25 J. Legal Stud. 287,
295-97 (1996) (demonstrating that the addition of a clearly inferior
third verdict option alters choices made by mock jurors); Stanley Sue,
Ronald E. Smith, & Cathy Caldwell, Effects of Inadmissible Evidence on
the Decisions of Simulated Jurors: A Moral Dilemma, 3 J. Applied Soc.
Psychol. 345, 350-51 (1973); William C. Thompson, Geoffrey T. Fong, & D.
L. Rosenhan, Inadmissible Evidence and Juror Verdicts, 40 J. Personality
& Soc. Psychol. 453, 457-62 (1981); Sharon Wolf & David A. Montgomery,
Effects of Inadmissible Evidence and Level of Judicial Admonishment to
Disregard on the Judgments of Mock Jurors, 7 J. Applied Soc. Psychol.
205, 212-16 (1977).

\[FN15\]. See Gretchen B. Chapman & Brian H. Bornstein, The More You Ask
For, the More You Get: Anchoring in Personal Injury Verdicts, 10 Applied
Cognitive Psychol. 519, 525-28, 532-33 (1996); Reid Hastie, David A.
Schkade, & John W. Payne, Juror Judgments in Civil Cases: Effects of
Plaintiff\'s Requests and Plaintiff\'s Identity on Punitive Damage
Awards, 23 Law & Hum. Behav. 445, 463-65 (1999); Verlin B. Hinsz &
Kristin E. Indahl, Assimilation to Anchors for Damage Awards in a Mock
Civil Trial, 25 J. Applied Soc. Psychol. 991, 1009- 10, 1016 (1995);
John Malouff & Nicola S. Schutte, Shaping Juror Attitudes: Effects of
Requesting Different Damage Amounts in Personal Injury Trials, 129 J.
Soc. Psychol. 491, 495 (1989); Allan Raitz, Edith Greene, Jane Goodman,
& Elizabeth F. Loftus, Determining Damages: The Influence of Expert
Testimony on Jurors\' Decision Making, 14 Law & Hum. Behav. 385, 390-94
(1990); see also Valerie P. Hans & Neil Vidmar, Judging the Jury 80
(1986) (reporting an experiment in which a mock jury appeared extremely
susceptible to a damage amount suggested by an attorney).

\[FN16\]. See Cass R. Sunstein, Daniel Kahneman, & David Schkade,
Assessing Punitive Damages (with Notes on Cognition and Valuation in
Law), 107 Yale L.J. 2071, 2100-04 (1998).

\[FN17\]. See Ronald Dworkin, Law\'s Empire 1 (1986) (\"It matters how
judges decide cases\").

\[FN18\]. Kevin M. Clermont & Theodore Eisenberg, Trial By Jury or
Judge: Transcending Empiricism, 77 Cornell L. Rev. 1124, 1127 n.7
(1992); see also Leonidas Ralph Mecham, Judicial Business of the United
States Courts: 1999 Annual Report of the Director 172-74 tbl.C-7 (1999).

\[FN19\]. Marc Galanter, Real World Torts: An Antidote to Anecdote, 55
Md. L. Rev. 1093, 1100 n.17 (1996) (estimating that 7% of cases end in
trials and 24% are decided on dispositive motions). If half of the 7% of
trials are jury trials, then juries decide 3.5% of all cases, while 24%
are decided on dispositive motions.

\[FN20\]. Jerome Frank, Law and the Modern Mind 104 (1930) (emphasis
added).

\[FN21\]. See, e.g., John J. Brunetti, Searching for Methods of Trial
Court Fact-Finding and Decision-Making, 49 Hastings L.J. 1491, 1491
(1998) (\"Like many new judges, I try to read as much as I can about the
judicial process. I was disappointed to find that while much has been
written about judicial philosophies of famous appellate court judges and
their modes of decision making, little has been written about trial
court fact-finding.\"); Donald C. Nugent, Judicial Bias, 42 Clev. St. L.
Rev. 1, 4 (1994) (noting with surprise that \"few studies analyze the
manner and method of the judiciary\'s decision-making process\"); Walter
V. Schaefer, Precedent and Policy, 34 U. Chi. L. Rev. 3, 23 (1966)
(bemoaning the legal profession\'s lack of \"techniques and tools which
are sensitive enough to explore the mind of man and report accurately
its conscious and subconscious operations\"); Andrew J. Wistrich, How
Cognitive Illusions Can Affect Legal Decision Making, Litig. Sec.
Newsletter for the Civ. Trial Law., Fall 1999, at 2, 5 (\"Very little
research has been done regarding the susceptibility of judges to
cognitive illusions.\"). But see John C. Anderson, D. Jordan Lowe, &
Philip M.J. Reckers, Evaluation of Auditor Decisions: Hindsight Bias
Effects and the Expectation Gap, 14 J. Econ. Psychol. 711, 725-27 (1993)
(reporting a study of judges that tested for hindsight bias); Theodore
Eisenberg, Differing Perceptions of Attorney Fees in Bankruptcy Cases,
72 Wash. U. L.Q. 979, 982-89 (1994) (reporting the results of a study of
the incidence of egocentric bias among bankruptcy judges and lawyers);
Reid Hastie & W. Kip Viscusi, What Juries Can\'t Do Well: The Jury\'s
Performance as a Risk Manager, 40 Ariz. L. Rev. 901, 904-08 (1998)
(discussing the results of a study of the behavior of judges and mock
jurors); Stephen Landsman & Richard F. Rakos, A Preliminary Inquiry into
the Effect of Potentially Biasing Information on Judges and Juries in
Civil Litigation, 12 Behavioral Sci. & L. 113 (1994) (reporting results
of experiment suggesting that judges and jurors may be similarly
influenced by exposure to potentially biasing information); Jennifer K.
Robbennolt, Punitive Damage Decision Making: The Decisions of Citizens
and Trial Court Judges, 25 Law & Hum. Behav. (forthcoming 2001)
(reporting results of study comparing damage awards of jury-eligible
citizens and trial court judges); W. Kip Viscusi, How Do Judges Think
About Risk? 1 Am. L. & Econ. Rev. 26 (1999) (reporting results of a
study of judges\' biases); Roselle L. Wissler, Allen J. Hart, & Michael
J. Saks, Decisionmaking About General Damages: A Comparison of Jurors,
Judges, and Lawyers, 98 Mich. L. Rev. 751, 776, 786 (1999) (studying the
factors that contribute to judges\' assessments of the severity of
injuries and judges\' awards for damages); Marianne M. Jennings, D.
Jordan Lowe, & Philip M.J. Reckers, Outcome Foreseeability and Its
Effects on Judicial Decisions (unpublished manuscript, on file with
authors) (reporting a study of the effects of hindsight bias on judges).

\[FN22\]. See Baum, supra note 7, at 89-124 (reviewing studies of the
strategy behind judicial decision making); Sisk et al., supra note 6, at
1385-96 (reviewing empirical studies of the influence of judges\' race,
sex, and political orientation on judicial decision making).

\[FN23\]. The recent paper by Viscusi, supra note 21, is a notable
exception.

\[FN24\]. See, e.g., Oliver Wendell Holmes, Jr., The Path of the Law, 10
Harv. L. Rev. 457, 466 (1897) (noting that the basis for judicial
decision making often \"lies \[in\] inarticulate and unconscious
judgment\"); Schaefer, supra note 21, at 22 (stating that judges \"lack
the ability to describe what happens\" when they make decisions).

\[FN25\]. See Hans & Vidmar, supra note 15, at 247-48.

\[FN26\]. See Anderson et al., supra note 21, at 725 (noting that
professional auditors are subject to the hindsight bias); Hal R. Arkes,
David Faust, Thomas J. Guilmette, & Kathleen Hart, Eliminating the
Hindsight Bias, 73 J. Applied Psychol. 305, 306 (1988) (demonstrating
that psychologists exhibit the hindsight bias); Hal R. Arkes, Robert L.
Wortmann, Paul D. Saville, & Allan R. Harkness, Hindsight Bias Among
Physicians Weighing the Likelihood of Diagnoses, 66 J. Applied Psychol.
252, 253 (1981) (indicating that \"physicians exhibited the hindsight
bias\"); Loren J. Chapman & Jean P. Chapman, Illusory Correlation as an
Obstacle to the Use of Valid Psychodiagnostic Signs, 74 J. Abnormal
Psychol. 271 (1969) (demonstrating that various heuristics inspire
erroneous beliefs in psychotherapists); Craig R. Fox, Brett A. Rogers, &
Amos Tversky, Options Traders Exhibit Subadditive Decision Weights, 13
J. Risk & Uncertainty 5, 16 (1996) (finding that option traders rely on
heuristics in probabilistic reasoning); Raanon Lipshitz & Dalya Barak,
Hindsight Wisdom: Outcome Knowledge and the Evaluation of Decisions, 88
Acta Psychologica 105, 121-23 (1995) (demonstrating that officers in the
Israeli defense forces commit the hindsight bias); Barbara J. McNeil,
Stephen G. Pauker, Harold C. Sox, Jr., & Amos Tversky, On the
Elicitation of Preferences for Alternative Therapies, 306 New Eng. J.
Med. 1259, 1261-62 (1982) (finding that physicians are susceptible to
framing effects); Gregory B. Northcraft & Margaret A. Neale, Experts,
Amateurs, and Real Estate: An Anchoring-and-Adjustment Perspective on
Property Pricing Decisions, 39 Organizational Behav. & Hum. Decision
Processes 84, 95-96 (1987) (reporting that real estate agents fall prey
to anchoring effects when estimating real estate prices); see also
Plous, supra note 8, at 258 (\"\[S\]everal studies have found that
experts display either roughly the same biases as college students or
the same biases at somewhat reduced levels.\" (citations omitted)).

\[FN27\]. See, e.g., Linda Babcock, Henry S. Farber, Cynthia Fobian, &
Eldar Shafir, Forming Beliefs about Adjudicated Outcomes: Perceptions of
Risk and Reservation Values, 15 Int\'l Rev. L. & Econ. 289, 296-97
(1995) (finding that framing effects had a similar impact on lawyer and
nonlawyer subjects); Craig R. Fox & Richard Birke, Lawyers Exhibit
Subadditivity when Forecasting Trial Outcomes (unpublished manuscript,
on file with authors) (demonstrating that lawyers exhibit
decision-making biases when assessing probabilities). But see Russell
Korobkin & Chris Guthrie, Psychology, Economics, and Settlement: A New
Look at the Role of the Lawyer, 76 Tex. L. Rev. 77, 99-101 (1997)
(reporting that lawyers are less susceptible than nonlawyers to framing
effects); Darrin R. Lehman, Richard O. Lempert, & Richard E. Nisbett,
The Effects of Graduate Training on Reasoning, 43 Am. Psychol. 431, 440
(1988) (finding that training in psychology, medicine, and law can
improve logical decision making).

\[FN28\]. Keeton, supra note 3, § 1.1.

\[FN29\]. See, e.g., Morris R. Cohen, Law and the Social Order: Essays
in Legal Philosophy 337 (1933) (explaining that \"we must not forget
that actual law is a human product\--made and administered by judges who
are not free from human limitations in intelligence and goodwill\");
Frank, supra note 20, at 100 (arguing that to understand judicial
decisions \"we must observe how ordinary men dealing with ordinary
affairs arrive at their judgments\"); Robert M. Cover, Forward: Nomos
and Narrative, 97 Harv. L. Rev. 4, 67 (1983) (noting that judges are
\"like the rest of us\"); Richard A. Posner, The Jurisprudence of
Skepticism, 86 Mich. L. Rev. 827, 859 (1988) (noting that \"\[t\]here is
no distinctive methodology of legal reasoning\").

\[FN30\]. Frank, supra note 4, at 410.

\[FN31\]. Federal Magistrates Act, Pub. L. No. 90-578, 82 Stat. 1107
(1968) (codified as amended at 28 U.S.C. §§ 631-639 (1994)).

\[FN32\]. See R. Lawrence Dessem, The Role of the Federal Magistrate
Judge in Civil Justice Reform, 67 St. John\'s L. Rev. 799, 834 (1993).
For more background on federal magistrate judges, see generally Carroll
Seron, The Roles of Magistrates in Federal District Courts (1983)
(reporting survey results documenting the work performed by
magistrates); Carroll Seron, The Roles of Magistrates: Nine Case Studies
(1985) (describing several different approaches to the use of magistrate
judges); Christopher E. Smith, United States Magistrates in the Federal
Courts: Subordinate Judges (1990) (providing an empirical analysis of
the role of magistrate judges). However, there are functions reserved
exclusively to federal district judges\--most notably, conducting felony
criminal trials.

\[FN33\]. 28 U.S.C. § 636(c) (1994 & Supp. IV 1998); Fed. R. Civ. Proc.
73. More recently, the Civil Justice Reform Act of 1990, further
expanded the power Federal Magistrates Judges enjoy. Pub. L. No.
101-650, tit. 1, 104 Stat. 5089, 5090-93 (codified as amended at 28
U.S.C. §§ 471-473 (1994)); see Dessem, supra note 32, at 811-32
(exploring the impact of the Civil Justice Reform Act on the use of
magistrate judges); Philip M. Pro & Thomas C. Hnatowski, Measured
Progress: The Evolution and Administration of the Federal Magistrate
Judges System, 44 Am. U. L. Rev. 1503, 1520-22 (1995) (describing the
increased role of magistrate judges in the wake of the Civil Justice
Reform Act).

\[FN34\]. Mecham, supra note 18, at 351 tbl.M-3.

\[FN35\]. Id. at 357 tbl.M-4A.

\[FN36\]. Id. at 360 tbl.M-5.

\[FN37\]. 28 U.S.C. § 631(b)(5).

\[FN38\]. 28 U.S.C. § 631(a).

\[FN39\]. See studies cited infra note 201.

\[FN40\]. The Psychology of Judging, questionnaire from the Federal
Judicial Center Workshop for Untied States Judges II (Nov. 9, 1999) (on
file with authors).

\[FN41\]. Under the boldface heading, \"Workshop for U.S. Magistrate
Judges, The Psychology of Judging, Judicial Survey,\" we provided the
following instructions:

Many of the points discussed by this panel are best understood if
experienced directly. We therefore ask that before the session starts,
you read and respond to each of the questions enclosed in this survey
(although doing so is voluntary, of course). Please do so independently
and please do not discuss the surveys with others while you are
responding to the questions. We shall collect these surveys before the
discussion and present the results during the panel session.

\[FN42\]. See infra Part II.

\[FN43\]. The items designed to test for framing effects and anchoring
each consisted of two different conditions, and the item designed to
test for the hindsight bias consisted of three different conditions. The
other two items were uniform. All twelve possible combinations of the
three variable items were created. Thus, judges received one of the
twelve different questionnaires. The order of the items was also
uniform.

\[FN44\]. The text on the last page read as follows:

Please note: This survey is designed to illustrate the psychological
phenomena being discussed by this panel. The panelists will present
aggregate results during the discussion. The panelists, however, would
also like the opportunity to comment respectfully on the aggregate
results of this survey at other public presentations and possibly in
published works. In no way will individual participants be identified as
part of any discussion of the results of this survey. (Identifying
information is not even being collected.) If, for any reason, you object
to the use of the results of this survey in any forum other than the
present panel, please indicate so by circling this paragraph and your
survey will be removed from any further analysis or discussion.

\[FN45\]. Mecham, supra note 18, at 44 (reporting that in the fall of
1999, there were 65 part-time and 454 full-time federal magistrate
judges).

\[FN46\]. Tversky & Kahneman, supra note 8, at 1128-30 (defining and
explaining anchoring effects).

\[FN47\]. Id. at 1128.

\[FN48\]. Id.

\[FN49\]. Id.

\[FN50\]. Id.

\[FN51\]. Tversky and Kahneman also used other number pairs and asked
subjects to estimate other quantities in this \"wheel of fortune\"
experiment. Id.

\[FN52\]. Fritz Strack & Thomas Mussweiler, Explaining the Enigmatic
Anchoring Effect: Mechanisms of Selective Accessibility, 73 J.
Personality & Soc. Psychol. 437, 437-39 (1997).

\[FN53\]. Plous, supra note 8, at 146 (referring to an unpublished study
by George Quattrone and colleagues).

\[FN54\]. Id.

\[FN55\]. See generally Wistrich, supra note 21 (describing the impact
anchoring can have in the courtroom).

\[FN56\]. Russell Korobkin & Chris Guthrie, Opening Offers and
Out-of-Court Settlement: A Little Moderation May Not Go a Long Way, 10
Ohio St. J. on Disp. Resol. 1, 12-13 (1994).

\[FN57\]. Id.

\[FN58\]. Id.

\[FN59\]. Id.

\[FN60\]. See Dale W. Broeder, The University of Chicago Jury Project,
38 Neb. L. Rev. 744, 756 (1959) (reporting that interviews conducted
with jurors revealed that plaintiff\'s damage requests anchored juror
damage determinations in six of seven cases).

\[FN61\]. See Chapman & Bornstein, supra note 15, at 526-27; Hastie et
al., supra note 15, at 463; Hinsz & Indahl, supra note 15, at 1009;
Malouff & Schutte, supra note 15, at 495; Raitz et al., supra note 15,
at 393.

\[FN62\]. Malouff & Schutte, supra note 15, at 495 tbl.1.

\[FN63\]. Chapman & Bornstein, supra note 15, at 525-26.

\[FN64\]. Malouff & Schutte, supra note 15, at 495. Researchers have
found not only that the plaintiff\'s requests for damages can anchor
jurors but also that statutory damage caps can anchor jurors. See, e.g.,
Hinsz & Indahl, supra note 15, at 1001-06; Jennifer K. Robbennolt &
Christina A. Studebaker, Anchoring in the Courtroom: The Effects of Caps
on Punitive Damages, 23 Law & Hum. Behav. 353, 361 (1999). Statutory
damage caps can also lead to anchoring and adjustment effects in
settlement. See, e.g., Linda Babcock & Greg Pogarsky, Damage Caps and
Settlement: A Behavioral Approach, 28 J. Legal Stud. 341, 362-68 (1999).

\[FN65\]. Sunstein et al., supra note 16, at 2109-30 (explaining the
susceptibility of juries to anchoring effects and suggesting reforms).

\[FN66\]. Id. at 2127 (finding that of the proposed reforms, an
\"incremental shift from jury to judicial determinations of punitive
damages appears to be the most promising\").

\[FN67\]. See Clark McCauley, Margo Durham, John B. Copley, & John P.
Johnson, Patients\' Perceptions of Treatment for Kidney Failure: The
Impact of Personal Experience on Population Predictions, 21 J.
Experimental Soc. Psychol. 138, 141-44 (1985) (demonstrating that people
rely on anchors derived from personal experience).

\[FN68\]. See 28 U.S.C. § 1332 (1994 & Supp. IV 1998) (providing that in
diversity cases, the federal district courts \"have original
jurisdiction of all civil actions where the matter in controversy
exceeds the sum or value of \$75,000\").

\[FN69\]. The response rate differed between the two conditions.
Excluding the two judges who granted the motion, 31.1% (or 51 out of
164) of the judges declined to answer the question, many citing a lack
of adequate information. Without the preliminary motion, only 17.5% (14
of the 80 who did not rule on the motion) of the judges failed to
provide an estimate, but of those judges asked to rule on the motion
first, 44% (37 of the 84 judges that denied the motion) declined to
answer. The difference in response rate was significant. z = 3.43, p \<
.001. How this difference might have affected the results (or why it
occurred) is unclear.

Throughout this Article, we reserve the term \"significant\" or
\"significance\" to denote the statistical rejection of the null
hypothesis that two variables are not related at a probability of 5% or
less. See William L. Hays, Statistics 230-66 (3d ed. 1981) (explaining
the logic of statistical hypothesis testing). In all cases, we report
the p-value, which is the measure of the likelihood that the null
hypothesis can be correctly rejected. We use the following four
different statistical tests in this Article: Fisher\'s exact test for
measures of association between two binary variables, as reported with
the z-score, see id. at 552-54; the t-test for differences between two
parametric samples, as reported with the t-statistic, see id. at
271-300; the Mann-Whitney test for differences between two nonparametric
samples, as reported with the Mann-Whitney U (adjusted for ties in all
cases), see id. at 587-89; and the \<\<chi\>\>2 test for different
distributions of categorical data, as reported with the \<\<chi\>\>2
square statistic, see id. at 305-13.

\[FN70\]. t(113) = 2.18, p = .031.

\[FN71\]. One of these two judges asserted that they wanted the
plaintiff to amend the complaint to specify an amount. One of the 87
judges in the Anchor condition did not respond to the question about the
motion, citing insufficient information.

\[FN72\]. A non-parametric test (more appropriate to positively skewed
data such as ours) also revealed that the damage estimates in the two
conditions differed significantly. Mann-Whitney, U = 4216.5, p = .048.

\[FN73\]. 28 U.S.C. § 1927 (1994) (authorizing fee and cost shifting
against litigants who unreasonably multiply proceedings); Fed. R. Civ.
P. 11 (providing for sanctions against parties who file frivolous
motions).

\[FN74\]. See supra notes 60-64 and accompanying text.

\[FN75\]. It is also possible, however, that jurors might be aware
of\--or, even worse, misinformed about\--a damage cap.

\[FN76\]. See generally Daniel Kahneman & Amos Tversky, Choices, Values,
and Frames, 39 Am. Psychologist 341 (1984) (discussing the psychological
phenomenon of framing); Daniel Kahneman & Amos Tversky, Prospect Theory:
An Analysis of Decision Under Risk, 47 Econometrica 263 (1979)
\[hereinafter Kahneman & Tversky, Prospect Theory\] (same); Amos Tversky
& Daniel Kahneman, The Framing of Decisions and the Psychology of
Choice, 211 Science 453 (1981) \[hereinafter Tversky & Kahneman, Framing
of Decisions\] (same); Amos Tversky & Daniel Kahneman, Rational Choice
and the Framing of Decisions, 59 J. Bus. S251 (1986) \[hereinafter
Tversky & Kahneman, Rational Choice\] (same).

\[FN77\]. See Kahneman & Tversky, Choices, Values, and Frames, supra
note 76, at 342-44; Kahneman & Tversky, Prospect Theory, supra note 76,
at 268-69; Tversky & Kahneman, Framing of Decisions, supra note 76, at
453-55; Tversky & Kahneman, Rational Choice, supra note 76, at S257-60.

\[FN78\]. See Amos Tversky & Daniel Kahneman, Advances in Prospect
Theory: Cumulative Representation of Uncertainty, 5 J. Risk &
Uncertainty 297, 308 tbl.4 (1992).

\[FN79\]. John P. Gould, The Economics of Legal Conflicts, 2 J. Legal
Stud. 279, 279-80 (1973).

\[FN80\]. Tversky & Kahneman, Rational Choice, supra note 76, at
S257-60.

\[FN81\]. Jeffrey J. Rachlinski, Gains, Losses, and the Psychology of
Litigation, 70 S. Cal. L. Rev. 113, 129 (1996).

\[FN82\]. In frivolous or low-probability litigation, by contrast,
litigants\' risk preferences are reversed. See Chris Guthrie, Framing
Frivolous Litigation: A Psychological Theory, 67 U. Chi. L. Rev. 163,
185-95 (2000). In frivolous cases, plaintiffs typically choose between
options that appear to represent low-probability gains, while defendants
choose between options that appear to represent low-probability losses.
Id. at 187. Decision makers selecting between low-probability gains tend
to make risk-seeking choices, while those selecting between
low-probability losses tend to make risk-averse choices. See Tversky &
Kahneman, supra note 78, at 306. Thus, in frivolous or low-probability
litigation, plaintiffs are relatively more inclined to go to trial than
are defendants. Guthrie, supra, at 187.

\[FN83\]. Rachlinski, supra note 81, at 128-29.

\[FN84\]. Id. at 128.

\[FN85\]. Id. at 128-29.

\[FN86\]. Id. at 135-44. For similar research, see Babcock et al., supra
note 27, at 296-97; Robin M. Hogarth, Ambiguity and Competitive Decision
Making: Some Implications and Tests, 19 Annals Operations Res. 31, 40-41
(1989); Russell Korobkin & Chris Guthrie, Psychological Barriers to
Litigation Settlement: An Experimental Approach, 93 Mich. L. Rev. 107,
30-42 (1994); Korobkin & Guthrie, supra note 27, at 96-101; Peter J. van
Koppen, Risk Taking in Civil Law Negotiations, 14 Law & Hum. Behav. 151,
158-64 (1990).

\[FN87\]. Rachlinski, supra note 81, at 150-60.

\[FN88\]. But see Guthrie, supra note 82, at 185-95 (discussing
experiments demonstrating that plaintiffs are more likely than
defendants to resist settlement in frivolous or low-probability cases).

\[FN89\]. Four judges (two in each condition) out of 167 (2.4%) declined
to respond.

\[FN90\]. z = 1.99, p = .047.

\[FN91\]. See Resnik, Managerial Judges, supra note 2, at 386-402
(illustrating situations in which judges might influence litigation).

\[FN92\]. Rachlinski, supra note 81, at 159-60.

\[FN93\]. See David Cohen & Jack L. Knetsch, Judicial Choice and
Disparities Between Measures of Economic Values, 30 Osgoode Hall L.J.
737, 749- 69 (1992).

\[FN94\]. See id. at 738.

\[FN95\]. Id. at 738-39.

\[FN96\]. See, e.g., id. at 751-69.

\[FN97\]. As discussed above, risk-neutral defendants should have been
willing to settle for any amount less than \$150,000; risk-neutral
plaintiffs should have been willing to settle for any amount greater
than \$50,000. The attorney\'s fees of \$50,000 for each side
effectively create a bargaining window of between \$50,000 and
\$150,000. The \$60,000 offer to the plaintiff thus represents one tenth
of the bargaining window, as does the \$140,000 offer for the defendant.

\[FN98\]. If the plaintiff accepts defendant\'s \$60,000 offer, the
defendant will retain \$140,000 of the \$200,000 in dispute (i.e., 70%).
If the defendant agrees to pay plaintiff \$140,000, the plaintiff will
obtain \$140,000 of the \$200,000 in dispute (i.e., 70%).

\[FN99\]. See generally Colin Camerer & Richard H. Thaler, Ultimatums,
Dictators and Manners, J. Econ. Persp., Spring 1995, at 209 (describing
this research).

\[FN100\]. Baruch Fischhoff, For Those Condemned to Study the Past:
Heuristics and Biases in Hindsight, in Judgment Under Uncertainty:
Heuristics and Biases 335, 341 (Daniel Kahneman, Paul Slovic, & Amos
Tversky eds., 1982).

\[FN101\]. Stephen J. Hoch & George F. Loewenstein, Outcome Feedback:
Hindsight and Information, 15 J. Experimental Psychol.: Learning Memory
& Cognition 605, 605 (1989); see also Baruch Fischhoff, Hindsight not=
Foresight: The Effect of Outcome Knowledge on Judgment Under
Uncertainty, 1 J. Experimental Psychol.: Hum. Perceptions & Performance
288 (1975) (first documenting the effects of hindsight on judgment
empirically).

\[FN102\]. See Scott A. Hawkins & Reid Hastie, Hindsight: Biased
Judgments of Past Events After the Outcomes Are Known, 107 Psychol.
Bull. 311, 312-13 (1990).

\[FN103\]. See id.

\[FN104\]. See Jeffrey J. Rachlinski, A Positive Psychological Theory of
Judging in Hindsight, 65 U. Chi. L. Rev. 571, 571 (1998).

\[FN105\]. See Hastie et al., supra note 13 at 605-09; Kamin &
Rachlinski, supra note 13, at 98-99; LaBine & LaBine, supra note 13, at
509-11; Stallard & Worthington, supra note 13, at 677-81.

\[FN106\]. Kamin & Rachlinski, supra note 13, at 93.

\[FN107\]. Id. at 97.

\[FN108\]. Id. at 95-96.

\[FN109\]. Id. at 97.

\[FN110\]. Id. at 94-99.

\[FN111\]. Id. at 98.

\[FN112\]. See Rachlinski, supra note 104, at 588-90.

\[FN113\]. See generally id. at 602-24 (reviewing applications of the
hindsight bias to legal issues).

\[FN114\]. Hal R. Arkes & Cindy A. Schipani, Medical Malpractice v. the
Business Judgment Rule: Differences in Hindsight Bias, 73 Or. L. Rev.
587, 630- 36 (1994); Christine Jolls, Cass R. Sunstein, & Richard
Thaler, A Behavioral Approach to Law and Economics, 50 Stan. L. Rev.
1471, 1527-33 (1998).

\[FN115\]. See Viscusi, supra note 21, at 60 (discussing various
proposals to give judges more authority over damages); see also Richard
A. Posner, An Economic Approach to the Law of Evidence, 51 Stan. L. Rev.
1477, 1500-02 (1999) (describing perceived differences between the
decisions of juries and judges).

\[FN116\]. See Hoch & Loewenstein, supra note 101, at 606
(\"\[H\]indsight bias is a robust phenomenon that is not easily
eliminated or even moderated.\" (citation omitted)). Even the
standard-bearer for economic analysis in the judiciary, Judge Richard
Posner, has confessed that he worries about the effects of the hindsight
bias on his thought process. Richard A. Posner, An Affair of State: The
Investigation, Impeachment, and Trial of President Clinton 2 (1999).

\[FN117\]. See Jay J.J. Christensen-Szalanski & Cynthia Fobian Willham,
The Hindsight Bias: A Meta-Analysis, 48 Organizational Behav. & Hum.
Decision Processes 147, 155 (1991).

\[FN118\]. Mendoza v. Lynaugh, 989 F.2d 191 (5th Cir. 1993).

\[FN119\]. \<\<chi\>\>2(4) = 46.91, p \< .001.

\[FN120\]. One of the fifty-eight judges in the \"Lesser\" condition
declined to respond to this question, one of the fifty-five judges in
the \"Affirm\" condition declined to respond, and all of the fifty-four
judges in the \"Vacate\" condition responded.

\[FN121\]. Mark Kelman, David E. Fallas, & Hilary Folger, Decomposing
Hindsight Bias, 16 J. Risk & Uncertainty 251, 253-54 (1998); Posner,
supra note 115, at 1528 (\"\[H\]indsight bias is often rational.\").

\[FN122\]. Hawkins & Hastie, supra note 102, at 311.

\[FN123\]. Id. at 314-16.

\[FN124\]. See Fischhoff, supra note 101, at 293-95.

\[FN125\]. Anderson et al., supra note 21, at 730; Viscusi, supra note
21, at 55; Jennings et al., supra note 21.

\[FN126\]. In re Chamberlain, 156 A. 42, 42 (N.J. Prerog. Ct. 1931).

\[FN127\]. Id. at 43.

\[FN128\]. Chase v. Peaver, 419 N.E.2d 1358, 1368 (Mass. 1981).

\[FN129\]. First Nat\'l Bank v. Martin, 425 So. 2d 415, 428 (Ala. 1982).

\[FN130\]. Professors Kahneman and Tversky describe the
representativeness heuristic in a series of articles. See Amos Tversky &
Daniel Kahneman, Belief in the Law of Small Numbers, 76 Psychol. Bull.
105 (1971) (exploring the human tendency to treat a sample as more
representative of a population than is justified by probability theory);
Daniel Kahneman & Amos Tversky, Subjective Probability: A Judgment of
Representativeness, 3 Cognitive Psychol. 430 (1972) \[hereinafter
Kahneman & Tversky, Subjective Probability\] (first defining the
\"representativeness heuristic\"); Daniel Kahneman & Amos Tversky, On
the Psychology of Prediction, 80 Psychol. Rev. 237 (1973) \[hereinafter
Kahneman & Tversky, Prediction\] (expanding upon their earlier treatment
of the representativeness heuristic); Tversky & Kahneman, supra note 8,
at 1124-28 (explaining various decision errors caused by the
representativeness heuristic); Amos Tversky & Daniel Kahneman, Judgments
of and by Representativeness, in Judgment Under Uncertainty: Heuristics
and Biases 84 (Daniel Kahneman, Paul Slovic, & Amos Tversky eds., 1982)
\[hereinafter Tversky & Kahneman, Representativeness\] (synthesizing
their prior work on representativeness); Amos Tversky & Daniel Kahneman,
Extensional Versus Intuitive Reasoning: The Conjunction Fallacy in
Probability Judgment, 90 Psychol. Rev. 293 (1983) \[hereinafter Tversky
& Kahneman, Conjunction Fallacy\] (exploring the \"conjunction
fallacy,\" a manifestation of the representativeness heuristic).

\[FN131\]. Kahneman & Tversky, Subjective Probability, supra note 130,
at 431 (conceding that representativeness \"is easier to assess than to
characterize\" because \"no general definition \[of it\] is
available\"); see also Plous, supra note 8, at 110 (noting that this
definition of representativeness is \"abstract and a little hard to
understand\").

\[FN132\]. Kahneman & Tversky, Prediction, supra note 130, at 238. The
authors point out that:

\[i\]n many situations, representative outcomes are indeed more likely
than others. However, this is not always the case because there are
factors (e.g., the prior probabilities of outcomes and the reliability
of the evidence) which affect the likelihood of outcomes but not their
representativeness. Because these factors are ignored, intuitive
predictions violate the statistical rules of prediction in systematic
and fundamental ways.

Id.

\[FN133\]. Id. at 238-39.

\[FN134\]. Id.

\[FN135\]. But see Jonathan J. Koehler, The Base Rate Fallacy
Reconsidered: Descriptive, Normative, and Methodological Challenges, 19
Behav. & Brain Sci. 1, 1-2 (1996) (arguing that the proponents of the
representativeness heuristic have overstated the extent to which people
actually neglect base rates).

\[FN136\]. See Richard Nisbett & Lee Ross, Human Inference: Strategies
and Shortcomings of Social Judgment 150 (1980) (relating \"the capacity
of vivid, concrete data to make a greater impact on inferences than that
made by data that are evidentially superior but dull and abstract in
quality\" to the phenomena of base-rate neglect).

\[FN137\]. See generally Gerd Gigerenzer & Daniel G. Goldstein,
Reasoning the Fast and Frugal Way: Models of Bounded Rationality, 103
Psychol. Rev. 650 (1996) (discussing efficient decision-making
strategies).

\[FN138\]. Tversky & Kahneman, supra note 8, at 1124-27 (explaining
various decision errors caused by the representativeness heuristic).
Some scholars have taken issue with the empirical work that supports the
representativeness heuristic. See, e.g., Leda Cosmides & John Tooby, Are
Humans Good Intuitive Statisticians After All? Rethinking Some
Conclusions from the Literature on Judgment Under Uncertainty, 58
Cognition 1, 3-4 (1996) (arguing that people use a \"frequentist\"
rather than a \"Bayesian\" approach to probability analysis); Koehler,
supra note 135, at 3 (arguing that Tversky and Kahneman have overstated
the extent to which people actually neglect base rates); Peter R.
Mueser, Nelson Cowan, & Kim T. Mueser, A Generalized Signal Detection
Model to Predict Rational Variation in Base Rate Use, 69 Cognition 267,
268-69 (1999) (arguing that a normative model with less restrictive
assumptions better explains how people make probabilistic judgments than
does the representativeness account).

\[FN139\]. See Jonathan J. Koehler, Why DNA Likelihood Ratios Should
Account for Error (Even When a National Research Council Report Says
They Should Not), 37 Jurimetrics J. 425, 432 (1997).

\[FN140\]. See, e.g., id. (\"Failure to consider the frequency of a
phenomenon when predicting its chance of occurrence in a specific
instance can lead to inverse fallacies in which people mistakenly
conclude that the denominator of the \[likelihood ratio\] is identical
to the denominator of the posterior odds ratio.\").

\[FN141\]. See id. at 433.

\[FN142\]. See David L. Faigman & A. J. Baglioni, Jr., Bayes\' Theorem
in the Trial Process: Instructing Jurors on the Value of Statistical
Evidence, 12 Law & Hum. Behav. 1, 7-13 (1988); William C. Thompson &
Edward L. Schumann, Interpretation of Statistical Evidence in Criminal
Trials: The Prosecutor\'s Fallacy and the Defense Attorney\'s Fallacy,
11 Law & Hum. Behav. 167, 174- 75, 178-80 (1987).

\[FN143\]. See Lehman et al., supra note 27, at 440.

\[FN144\]. Ward Casscells, Arno Schoenberger, & Thomas B. Graboy,
Interpretations by Physicians of Clinical Laboratory Results, 299 New
Eng. J. Med. 999, 999-1000 (1978).

\[FN145\]. 159 Eng. Rep. 299 (Ex. Ch. 1863).

\[FN146\]. See David M. Eddy, Probabilistic Reasoning in Clinical
Medicine: Problems and Opportunities, in Judgment Under Uncertainty:
Heuristics and Biases 249, 253-54 (Daniel Kahneman, Paul Slovic, & Amos
Tversky eds., 1982).

\[FN147\]. Professor Kaye identified the logical problems with the res
ipsa loquitur doctrine more than 20 years ago. See David Kaye,
Probability Theory Meets Res Ipsa Loquitur, 77 Mich. L. Rev. 1456,
1458-64 (1979). The Restatement (Second) of Torts articulated the
doctrine as follows:

It may be inferred that harm suffered by the plaintiff is caused by
negligence of the defendant when (a) the event is of a kind which
ordinarily does not occur in the absence of negligence; (b) other
responsible causes, including the conduct of the plaintiff and third
persons, are sufficiently eliminated by the evidence; and (c) the
indicated negligence is within the scope of the defendant\'s duty to the
plaintiff.

Restatement (Second) of Torts § 328D(1) (1965). Drafts of the
Restatement (Third) of Torts correct this error. See infra note 158.

\[FN148\]. Eight out of 167 judges, or 4.8%, did not respond.

\[FN149\]. \<\<chi\>\>2(2) = 53.24, p \< .001. The statistic tests
against the null hypothesis that the distribution of incorrect responses
was random.

\[FN150\]. See Eddy, supra note 146, at 253-54.

\[FN151\]. Amos Tversky & Daniel Kahneman, Evidential Impact of Base
Rates, in Judgment Under Uncertainty: Heuristics and Biases 153, 156-58
(Daniel Kahneman, Paul Slovic, & Amos Tversky eds., 1982).

\[FN152\]. Smith v. Rapid Transit, Inc., 58 N.E.2d 754, 755 (Mass.
1945).

\[FN153\]. Id.

\[FN154\]. See Charles Nesson, The Evidence or the Event? On Judicial
Proof and the Acceptability of Verdicts, 98 Harv. L. Rev. 1357, 1368-77
(1985); Laurence H. Tribe, Trial by Mathematics: Precision and Ritual in
the Legal Process, 84 Harv. L. Rev. 1329, 1344-50 (1971). But see
Jonathan J. Koehler & Daniel N. Shaviro, Veridical Verdicts: Increasing
Verdict Accuracy Through the Use of Overtly Probabilistic Evidence and
Methods, 75 Cornell L. Rev. 247, 274-75 (1990) (arguing for greater
reliance on statistical evidence in the courts).

\[FN155\]. Kaye, supra note 147, at 1457.

\[FN156\]. Restatement (Second) of Torts § 328D(1)(a) (1965).

\[FN157\]. See Jeffrey J. Rachlinski, Heuristics and Biases in the
Courts: Ignorance or Adaptation?, 79 Or. L. Rev. 61, 82-85 (2000).

\[FN158\]. The Restatement (Third) of Torts: Products Liability includes
the following language to describe the doctrine of res ipsa loquitur:

It may be inferred that the harm sustained by the plaintiff was caused
by a product defect existing at the time of sale or distribution,
without proof of a specific defect, when the incident that harmed the
plaintiff:

\(a\) was of a kind that ordinarily occurs as a result of product
defect; and

\(b\) was not, in the particular case, solely the result of causes other
than product defect existing at the time of sale or distribution.

Restatement (Third) of Torts: Products Liability § 3 (1998). The
proposed Restatement (Third) of Torts: General Principles, adopts the
following language for res ipsa loquitur: \"It may be inferred that the
defendant has been negligent when the accident causing the plaintiff\'s
physical harm is a type of accident that ordinarily happens because of
the negligence of the class of actors of which the defendant is the
relevant member.\" Restatement (Third) of Torts: General Principles § 15
(Discussion Draft, 1999).

\[FN159\]. See, e.g., Michael Ross & Fiore Sicoly, Egocentric Biases in
Availability and Attribution, 37 J. Personality & Soc. Psychol. 322
(1979) (testing for egocentric biases in joint activities).

\[FN160\]. See Neil D. Weinstein, Unrealistic Optimism About Future Life
Events, 39 J. Personality & Soc. Psychol. 806, 809-11 (1980).

\[FN161\]. See Ola Svenson, Are We All Less Risky and More Skillful Than
Our Fellow Drivers? 47 Acta Psychologica 143, 145-46 (1981).

\[FN162\]. See K. Patricia Cross, Not Can, But Will College Teaching Be
Improved?, New Directions for Higher Educ., Spring 1997, at 1, 9-10.

\[FN163\]. See Lynn A. Baker & Robert E. Emery, When Every Relationship
Is Above Average: Perceptions and Expectations of Divorce at the Time of
Marriage, 17 Law & Hum. Behav. 439, 441-43 (1993) (finding that recently
married couples almost unanimously expect that they will not get
divorced, despite knowing that the divorce rate is fifty percent).

\[FN164\]. See Ross & Sicoly, supra note 159, at 324.

\[FN165\]. Id. at 325-26.

\[FN166\]. See Susan T. Fiske & Shelley E. Taylor, Social Cognition
78-82 (1991) (describing theories that account for egocentric biases).

\[FN167\]. See id.

\[FN168\]. See id.

\[FN169\]. See Baker & Emery, supra note 163, at 446-48.

\[FN170\]. See Fiske & Taylor, supra note 166, at 78-82.

\[FN171\]. See Ross & Sicoly, supra note 159, at 324.

\[FN172\]. George Loewenstein, Samuel Issacharoff, Colin Camerer, &
Linda Babcock, Self-Serving Assessments of Fairness and Pretrial
Bargaining, 22 J. Legal Stud. 135, 141 (1993) (discussing the origins of
egocentric biases).

\[FN173\]. See Svenson, supra note 161, at 145-46.

\[FN174\]. See, e.g., Linda Babcock & George Loewenstein, Explaining
Bargaining Impasse: The Role of Self-Serving Biases, J. Econ. Persp.,
Winter 1997, at 109, 110-11; Babcock & Pogarsky, supra note 64, at
352-54; Loewenstein et al., supra note 172, at 140-55.

\[FN175\]. See, e.g., Babcock & Loewenstein, supra note 174, at 119
(noting that egocentric biases are likely to be \"an important
determinant of bargaining impasse\"); Babcock & Pogarsky, supra note 64,
at 352-53 (noting that there is \"abundant empirical evidence that
individuals consistently exhibit \'self-serving biases\' during
negotiations\").

\[FN176\]. Loewenstein et al., supra note 172, at 145.

\[FN177\]. Id.

\[FN178\]. Id. at 150.

\[FN179\]. Id.

\[FN180\]. For example, next to the line marked \"\[i\]n the highest
quartile,\" we include the following explanation: \"(meaning the rate at
which you have been overturned is higher than that of 75% of the
magistrate judges in this room).\"

\[FN181\]. Twelve judges out of 167 (7.2%) declined to respond to this
question.

\[FN182\]. \<\<chi\>\>2(3) = 107.3, p \< .001. The statistic tests the
null hypothesis that 25% of the responses would fall into each of the
four quartiles (which would be normatively correct).

\[FN183\]. \<\<chi\>\>2(2) = 46.4, p \< .001. The statistic tests the
null hypothesis that the responses would fall equally into each of the
three quartiles other than the highest (which would be normatively
correct).

\[FN184\]. See Babcock & Loewenstein, supra note 174, at 110-11.

\[FN185\]. Eisenberg, supra note 21, at 983-87.

\[FN186\]. Id. at 983 tbl.1.

\[FN187\]. Id. at 986 tbl.2.

\[FN188\]. 28 U.S.C. § 1292(b) (1994).

\[FN189\]. 28 U.S.C. § 2253(c) (Supp. IV 1998).

\[FN190\]. Slack v. McDaniel, 529 U.S. 473, 484 (2000).

\[FN191\]. In civil cases, such requests can be made under Fed. R. Civ.
P. 59 and Fed. R. Civ. P. 60. In criminal cases, collateral attacks on
the verdict can be brought under 28 U.S.C. § 2255 (Supp. IV 1998).

\[FN192\]. See Shelley E. Taylor & Jonathan D. Brown, Illusion and
Well-Being: A Social Psychological Perspective on Mental Health, 103
Psychol. Bull. 193, 199-200 (1988).

\[FN193\]. In constructing the comparisons in Table 4, we contrasted our
results with those of studies that used materials that were the most
comparable to the questions that we used in our study.

\[FN194\]. Malouff & Schutte, supra note 15, at 494-95 tbl.1.

\[FN195\]. See Korobkin & Guthrie, supra note 86, at 130-38; Rachlinski,
supra note 81, at 135-44.

\[FN196\]. Rachlinski, supra note 81, at 144.

\[FN197\]. Korobkin & Guthrie, supra note 27, at 100-01 (finding that
lawyer subjects did not seem to be as affected by framing as
laypersons).

\[FN198\]. Christensen-Szalanski & Willham, supra note 117, at 161
tbl.3.

\[FN199\]. 172% minus 100% divided by 3 conditions.

\[FN200\]. Three mock-jury studies used binary decisions: Hastie et al.,
supra note 13, at 606 (24% shift); Kamin & Rachlinski, supra note 13, at
98 (34% shift); Stallard & Worthington, supra note 13, at 679 (28%
shift).

\[FN201\]. See Anderson et al., supra note 21, at 725-30; Hastie &
Viscusi, supra note 21, at 906; Viscusi, supra note 21, at 46-55;
Jennings et al., supra note 21. The studies conducted by Professors
Viscusi and Hastie found that judges were somewhat less susceptible to
the hindsight bias, see Hastie & Viscusi, supra note 21, at 906;
Viscusi, supra note 21, at 29, but we suspect that the sample of judges
in these studies (those who chose to attend a conference on law and
economics) and the context within which the study took place (a law and
economics conference) may have induced somewhat more calculated
reasoning processes that dampened the effect.

\[FN202\]. Casscells et al., supra note 144, at 1000.

\[FN203\]. Svenson, supra note 161, at 145-46.

\[FN204\]. Cross, supra note 162, at 10.

\[FN205\]. See, e.g., Daniel Kahneman & Amos Tversky, On the Reality of
Cognitive Illusions, 103 Psychol. Rev. 582, 582 (1996). Some scholars
have criticized these methods, however. See, e.g., Cosmides & Tooby,
supra note 138, at 11-14 (arguing that cognitive psychology is
inconsistent with principles of behavior derived from evolution); Gerd
Gigerenzer, How to Make Cognitive Illusions Disappear: Beyond
\"Heuristics and Biases\", 2 Eur. Rev. Soc. Psychol. 83 (1991) (arguing
that cognitive psychologists overstate the applicability of their
findings to real world decisions).

\[FN206\]. See Kahneman & Tversky, supra note 205, at 582 (explaining
methods of cognitive psychologists).

\[FN207\]. Tversky & Kahneman, Rational Choice, supra note 76, at S274.

\[FN208\]. Id.

\[FN209\]. See Rachlinski, supra note 104, at 576.

\[FN210\]. Steven J. Kachelmeier & Mohamed Shehata, Examining Risk
Preferences Under High Monetary Incentives: Experimental Evidence from
the People\'s Republic of China, 82 Am. Econ. Rev. 1120, 1123-24 (1992).

\[FN211\]. Rachlinski, supra note 81, at 154 & tbl.2 (demonstrating that
framing effects influence actual settlement negotiations); Marijke
Malsch, Lawyers\' Predictions of Judicial Decisions: A Study on
Calibration of Experts (1989) (unpublished Ph.D. dissertation, Vrije
Universiteit, Amsterdam) (on file with authors) (finding that lawyers in
actual cases are overconfident of their ability to predict judges\'
decisions).

\[FN212\]. Fischhoff, supra note 100.

\[FN213\]. See supra notes 126-29 and accompanying text.

\[FN214\]. See Jerome Frank, Are Judges Human?, 80 U. Pa. L. Rev. 17,
233 (1931).

\[FN215\]. See Kahneman & Tversky, Choices, Values, and Frames, supra
note 76, at 343-44; Kahneman & Tversky, Prospect Theory, supra note 76,
at 268-69; Tversky & Kahneman, Framing of Decisions, supra note 76, at
456; Tversky & Kahneman, Rational Choice, supra note 76, at S257-58. A
decision maker could also pursue a simple economic cost-benefit
assessment of the decision as a way of substituting a different, perhaps
superior, cognitive process.

\[FN216\]. Popular books on negotiation suggest precisely this strategy.
See, e.g., Roger Fisher & William Ury, Getting to Yes: Negotiating
Agreement Without Giving In 97-106 (2d ed. 1991) (advising people to
always consider their best alternative to a negotiated settlement before
entering into negotiations).

\[FN217\]. See Rachlinski, supra note 81, at 154-60 (arguing that the
risk-seeking tendencies that the loss frame produces encourages
defendants to undertake risky litigation strategies).

\[FN218\]. See Thomas D. Lyon & Jonathan J. Koehler, The Relevance
Ratio: Evaluating the Probative Value of Expert Testimony in Child
Sexual Abuse Cases, 82 Cornell L. Rev. 43, 46-47 (1996).

\[FN219\]. Id. at 45.

\[FN220\]. See Shelley E. Taylor, Positive Illusions: Creative
Self-Deception and the Healthy Mind 59-65 (1989).

\[FN221\]. Id. at 214 (\"\[M\]ildly depressed people actually have a
somewhat more accurate view of reality, at least about certain things,
than do people who are not depressed.\").

\[FN222\]. Ethical rules limiting ex parte judicial contacts generally
forbid judges from pursuing the most obvious means of assessing the
certainty of one\'s judgment\--seeking an outside opinion. See Charles
W. Wolfram, Modern Legal Ethics § 11.3.3 (1986).

\[FN223\]. Rachlinski, supra note 104, at 586-88 (reviewing studies on
ways to reduce the influence of the hindsight bias).

\[FN224\]. Id. at 586.

\[FN225\]. Id.

\[FN226\]. See, e.g., Posner, supra note 115, at 1501; Sunstein et al.,
supra note 16, at 2127; Viscusi, supra note 21, at 60.

\[FN227\]. Mark Curriden, Putting the Squeeze on Juries, A.B.A. J., Aug.
2000, at 52, 53.

\[FN228\]. See supra notes 12-16 and accompanying text.

\[FN229\]. Professors Kalven and Zeisel noted decades ago in their
well-known empirical study that judges and juries usually agree on trial
verdicts, but they diverge in other, predictable circumstances. See
Harry Kalven, Jr. & Hans Zeisel, The American Jury 104-17 (1966). Kalven
and Zeisel found that disparate assessments of evidence produced most of
the judge-jury disagreements. Id. at 115.

\[FN230\]. See Plous, supra note 8, at 211-14 (reviewing comparisons of
group and individual judgment and concluding that group decision making
reduces biases in some cases). Groups pose problems of their own,
however, and can sometimes make worse decisions than individuals. See
David Schkade, Cass R. Sunstein, & Daniel Kahneman, Deliberating About
Dollars: The Severity Shift, 100 Colum. L. Rev. 1139, 1164-66 (2000);
Cass R. Sunstein, Essay: Deliberative Trouble? Why Groups Go to
Extremes, 110 Yale L.J. 71 (2000).

\[FN231\]. Hawkins & Hastie, supra note 102, at 321.

\[FN232\]. See generally Rachlinski, supra note 157 (discussing
adaptations in the legal system to cognitive illusions).

\[FN233\]. Fed. R. Evid. 407.

\[FN234\]. See Rachlinski, supra note 104, at 608-13.

\[FN235\]. Id. at 612.

\[FN236\]. Id. at 621.

\[FN237\]. Keeton, supra note 3, at 1.

\[FN238\]. Nugent, supra note 21, at 4; see also Harry T. Edwards, The
Judicial Function and the Elusive Goal of Principled Decisionmaking,
1991 Wis. L. Rev. 837, 838 (\"\[Judges\] strive, most often
successfully, to decide cases in accord with the law.\").

\[FN239\]. Frank, supra note 4, at 426.

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