Journal of Political Economy Vol. 115 No. 2 2007
Evolutionary Efficiency and Happiness
Abstract
We model happiness as a measurement tool used to rank alternative actions. Evolution favors a happiness function that measures the individual’s success in relative terms. The optimal function is based on a time‐varying reference point—or performance benchmark—that is updated over time in a statistically optimal way in order to match the individual’s potential. Habits and peer comparisons arise as special cases of such an updating process. This updating also results in a volatile level of happiness that continuously reverts to its long‐term mean. Throughout, we draw a parallel with a problem of optimal incentives, which allows us to apply statistical insights from agency theory to the study of happiness.
- DOI
- 10.1086/516737
- Volume
- 115
- Issue
- 2
- Pages
- 302-337
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref