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Subjective Happiness in Behavioral Contracts

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  • Junyi Chai

    (BNU-HKBU United International College
    Osaka University)

Abstract

This paper studies how payment schemes influence subjective happiness. Self-adaptation and interpersonal comparisons are internal and external determinants of happiness, respectively. We study the influence of contracts on employees' subjective happiness, and further on their willingness-to-work behaviors. We use quantitative manners and prospect theory's gain-loss utility function to measure happiness coming from binary payment schemes. Our analysis predicts the existence of a ratio between the bonus and the payment base, under which people who have a relatively high envy level cannot feel happy all the time. We enlighten how a bonus produces an incentive and point out strategies for extending the time of experiencing happiness. We predict current happiness coming from future outcomes and further measure the overall happiness on a calendar time.

Suggested Citation

  • Junyi Chai, 2023. "Subjective Happiness in Behavioral Contracts," Journal of Happiness Studies, Springer, vol. 24(7), pages 2245-2260, October.
    • Handle: RePEc:spr:jhappi:v:24:y:2023:i:7:d:10.1007_s10902-023-00678-8
    DOI: 10.1007/s10902-023-00678-8
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