The jurisprudence of welfare maximization. Embracing complexity and uncertainty in the environmental, health and safety context

The application of cost-benefit analysis to regulation is widely believed to provide for a disciplined method of rationally assessing the consequences of proposed courses of action. This article exposes a critical flaw in the neoclassical welfare economic paradigm of cost-benefit assessment and argues that it is insufficient to apply a single value framework to reality. Taking account of the complexity and uncertainty of certain aspects of real-world phenomena, the article describes the way some common understanding of an underlying concept of 'reality-based' regulatory law and economics can be reached. The article thereby indicates how related behavioral sciences can deepen our understanding of regulation.