What Happiness Research Can Tell Us About Self-Control Problems And Utility Misprediction
AbstractNeoclassical economic theory rules out systematic errors in consumption choice. According to the basic view, individuals know what they choose. They are able to predict how much utility an activity or a good produces for them now and in the future and they can maximize their utility. This implies that behavior reveals consistent preferences. This approach makes it impossible to detect and understand sub-optimal consumption decisions, due to problems of self-control and the misprediction of utility. We propose the economics of happiness as a methodological approach to study these phenomena. Based on proxy measures for experienced utility, it is, in principle, possible to directly address whether some observed behavior is sub-optimal and is therefore reducing a person’s well-being. We discuss recent evidence on smoking and eating habits, TV viewing and commuting choice.
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Bibliographic InfoPaper provided by Institute for Empirical Research in Economics - University of Zurich in its series IEW - Working Papers with number 267.
Date of creation: Jan 2006
Date of revision:
adaptation; individual decision-making; revealed preference; self-control; subjective well-being; utility misprediction;
Other versions of this item:
- Stutzer, Alois & Frey, Bruno S., 2006. "What Happiness Research Can Tell Us About Self-Control Problems and Utility Misprediction," IZA Discussion Papers 1952, Institute for the Study of Labor (IZA).
- D00 - Microeconomics - - General - - - General
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
- I12 - Health, Education, and Welfare - - Health - - - Health Production
- I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-01-29 (All new papers)
- NEP-CBE-2006-01-29 (Cognitive & Behavioural Economics)
- NEP-DCM-2006-01-29 (Discrete Choice Models)
- NEP-EVO-2006-01-29 (Evolutionary Economics)
- NEP-EXP-2006-01-29 (Experimental Economics)
- NEP-HPE-2006-01-29 (History & Philosophy of Economics)
- NEP-MIC-2006-01-29 (Microeconomics)
- NEP-SOC-2006-01-29 (Social Norms & Social Capital)
- NEP-UPT-2006-01-29 (Utility Models & Prospect Theory)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- B. Douglas Bernheim & Antonio Rangel, 2004. "Addiction and Cue-Triggered Decision Processes," American Economic Review, American Economic Association, vol. 94(5), pages 1558-1590, December.
- Bruno S. Frey & Susanne Neckermann, 2009.
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CESifo Working Paper Series
2531, CESifo Group Munich.
- Bruno S. Frey & Susanne Neckermann, 2008. "Academics Appreciate Awards. A New Aspect of Incentives in Research," CREMA Working Paper Series 2008-32, Center for Research in Economics, Management and the Arts (CREMA).
- Bruno S. Frey & Susanne Neckermann, 2008. "Academics Appreciate Awards. A New Aspect of Incentives in Research," IEW - Working Papers 400, Institute for Empirical Research in Economics - University of Zurich.
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- Neckermann, Susanne & Frey, Bruno S., 2013. "And the winner is…? The motivating power of employee awards," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 46(C), pages 66-77.
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