Cognitive Psychology and Empirical Insights for ITA

Cognitive psychology affects information gathering, analysis, and decision-making. There is no evidence that international investment law is immune from those influences, yet the influence of psychology has been remarkably under-scrutinized. To bridge the divide, Chapter 2 explores the roots of law and psychology and considers how cognition errors could influence international investment law. It then describes the literature on cognitive illusions, including illusions involving information accessibility (i.e., availability, representativeness, primacy, and recency), information presentation (i.e., framing, loss aversion, and anchoring), and self-assessments (i.e., confirmation bias, egocentrism, and bias blind spots). It then preliminarily explores how these phenomena might affect debates about international investment dispute settlement. The final section explores debiasing opportunities deriving from quality empiricism.