On the genesis of Hedonic Adaptation
AbstractSome sensations, in addition to guide behavior, serve an extra and even more important role: as warning or defense mechanisms (e.g. pain, fever). Additionally, intense sensations are costly from a fitness point of view. With only these two biological facts we show that Nature must design utility functions with regulation mechanisms such as hedonic adaptation or expectation-based preferences. Even though they are rarely incorporated into economic models, such mechanisms are widely recognized and documented in many fields such as neuroscience and psychology. Using such utility functions economists will not only provide more accurate welfare predictions, but we will also increase the number of behavioral phenomena that we are able to explain. Finally, we provide as an application a model of the psychological defenses.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 19929.
Date of creation: 29 Jul 2009
Date of revision:
hedonic adaptation; evolution; expectations; decision utility; experienced utility;
Find related papers by JEL classification:
- D03 - Microeconomics - - General - - - Behavioral Economics; Underlying Principles
- B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Institutional; Evolutionary
- I00 - Health, Education, and Welfare - - General - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-23 (All new papers)
- NEP-EVO-2010-01-23 (Evolutionary Economics)
- NEP-HAP-2010-01-23 (Economics of Happiness)
- NEP-NEU-2010-01-23 (Neuroeconomics)
- NEP-UPT-2010-01-23 (Utility Models & Prospect Theory)
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