Throughout its history, the development of theoretical law and economics has depended on, and been shaped by, empirical analyses of law. Theoretical law and economics scholars cannot draw persuasive positive or normative conclusions about legal rules unless the models employed accurately capture the factors affecting people’s responses to legal rules. Models thus must accurately describe decision-makers’ decision-making environment, available choices, and decision-making processes. Empirical analysis plays a vital role in theoretical scholars’ ability to develop such models. Empirical analyses can improve theoretical models by testing the predictions of models; refuted theoretical predictions regularly spur lead theoreticians to revise and improve their models. Empirical analyses also contribute by providing direct evidence on the decision-making environment, available choice sets, or decision-makers’ mental processes. This interaction of empirical analysis and theory has led theoretical law and economics to rely increasingly on models predicated on incomplete information, incomplete contracting, and decision-making that deviates from rational choice theory.