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Why known unknowns may be better than knowns, and how that matters for the evolution of happiness

Author

Listed:
  • Stennek, Johan

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

Abstract

Rayo and Becker (2007) model happiness as an imperfect measurement tool: It provides a partial ordering of alternative courses of actions. In this note, decisionmakers use their inability to rank two actions, to infer rankings of other pairs of actions. It is demonstrated that coarser happiness information actually increases the power of inference. As a result behavior is maximizing, not merely satisficing, almost independent of how coarse the happiness information is. Moreover, to support inference, evolution selects a happiness function with different properties than the one maximizing direct sensory information.

Suggested Citation

  • Stennek, Johan, 2022. "Why known unknowns may be better than knowns, and how that matters for the evolution of happiness," Working Papers in Economics 829, University of Gothenburg, Department of Economics, revised Jan 2024.
    • Handle: RePEc:hhs:gunwpe:0829
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    More about this item

    Keywords

    Indirect evolutionary approach; utility function;

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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