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Famed Psychologist Suggest “Anchoring” Impact of Medical Malpractice Caps

Over the past several decades there has been a significant boom in an academic arena often referred to as “Law and Psychology.” Of course the topic includes a vast swath of legal issues all connected to applying new advances in psychology to various parts of the creation and application of laws. For example, many legal scholars, including Chicago legal professor John Bronsteen, are leading the way in advocating for policymakers to make decisions in part based on psychological information about personal well-being and happiness. Many of those scholars had previously discussed the way that psychological knowledge should influence criminal sentencing.

Recently, the “Godfather” of many of the most important 20th century advances in experimental psychology published a new book that explores one way that psychological findings can impact personal injury cases. In his latest tome, “Thinking, Fast and Slow,” Daniel Kahneman explains how the heuristic known as “anchoring” may skew results in certain personal injury damage awards if damage caps are implemented. Brain injury lawsuits would often fall under the damage limits proposed in many states and at the federal level.

The principle of anchoring refers to the fact that when people are asked to quantify something-such as a brain injury damage amount-they are influenced by figures that they are exposed to beforehand. This is true even when those figures have no real connection to the items being quantified. For example, in the classic anchoring experiment, participants are asked two questions in this order:

1. Was John F. Kennedy older or younger than 55 years old when he was assassinated?
2. How old would you guess John F. Kennedy was when he was assassinated?

Half of the study’s participants would be asked an alternative version of the first question where 55 years old was replace with 40 years old. Surveyors always find that what age people guess in the second question is influenced by the form of the first question. In other words, the older the age suggested in question one, the older the guess in question two. On one hand this is logical in that participants might assume that the first question is a “hint” indicating what the actual amount is close to. However, researchers have found that the distorting effect of the first question applied even when it was obviously wrong. For example, even where the first question asked if JFK was older or young than 95 years old, the effects were found. What this means is that when asked to quantify something not necessarily known cold, people are heavily influenced by even arbitrary quantities that they are exposed to.

In Thinking, Kahneman suggests that anchoring may lead to unintended consequences when injury lawsuit damage caps are instituted. He suggests that when juries are told that the cap of any damages cannot be higher than $1 million, then jurors may use that cap as an anchor. In that way, awards that might otherwise be lower are arbitrarily inflated close to that cap amount. Contrary to popular belief, therefore, smaller defendants who might otherwise be forced to pay more modest sums will be adversely affected by the cap.

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