Evolutionary Efficiency and Happiness
Top Cited Papers
- 1 April 2007
- journal article
- Published by University of Chicago Press in Journal of Political Economy
- Vol. 115 (2) , 302-337
- https://doi.org/10.1086/516737
Abstract
We model happiness as a measurement tool used to rank alternative actions. Evolution favors a happiness function that measures the in- dividual'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.Keywords
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