Social Value Orientation and the Law

Social value orientation is a psychological trait defined as an individual’s natural preference with respect to the allocation of resources. Law and economics scholarship takes as its starting point the rational actor, who is by definition interested solely in maximizing her own personal utility. But social psychology research demonstrates that, in study after study, approximately half of individuals demonstrate a “prosocial” orientation, meaning that they are interested in maximizing the total outcome of the group and are dedicated to an equal split of resources. Only around a quarter of individuals identify as “proself” individualists who prefer to maximize their own outcome per the rational actor model, and members of yet another, smaller group identify as “proself” competitors who want to maximize the relative difference between their own and others’ outcomes. This Article presents social psychologists’ findings regarding the nature of social value orientation and the role that it plays in guiding behavior. It then assesses legal theory and doctrine through the lens of social value orientation in several discrete substantive areas—contract law, corporate law, and family law—as well as in legal procedure and process, showing that “proself” and “prosocial” categories offer a meaningful and helpful way of understanding current doctrine and its effects on behavior. A consideration of social value orientation provides an important, empirical counterbalance to the rationality assumptions of law and economics, helping to show that personal utility maximization neither consistently guides the development of legal doctrine nor dictates human behavior in response to the law. In addition, taking social value orientation seriously suggests insights for the very nature of the relationship between law and human behavior, implicating “nudges,” the potential “crowding out” effect of laws that invoke extrinsic motivation, and the ultimate character of human utility