There is a close but largely unexplored connection between law and economics and cognitive psychology. Law and economics applies economic models, modes of analysis, and argument to legal problems. Economic theory can be applied to legal problems for predictive, explanatory, or evaluative purposes. In explaining or assessing human action, economic theory presupposes a largely unarticulated account of rational, intentional action. Philosophers typically analyze intentional action in terms of desires and beliefs. I intend to perform some action because I believe that it will (is likely to) produce an outcome that I desire. This standard “belief-desire” model of action invokes what philosophers of psychology and action theorists aptly refer to as a “folk psychology.”

According to Jules Coleman, Rational Choice (RC) Theory holds that human action is both intentional and rational. “The rationality of intentional action is evaluated along the two dimensions corresponding to the two elements of the belief-desire model.” On the belief-dimension, RC Theory assumes that people are “able to draw appropriate inferences from the information (or truths) they possess.”