On the Causes and Consequences of Hedonic Adaptation

19 Pages Posted: 14 Aug 2009 Last revised: 6 Aug 2012

See all articles by Ricardo Perez-Truglia

Ricardo Perez-Truglia

University of California, Berkeley; National Bureau of Economic Research (NBER)

Date Written: May 1, 2010

Abstract

We provide a simple evolutionary explanation for the emergence of hedonic adaptation. The model's key assumption is that, apart from guiding long-term behavior, some sensations fulfill warning and defense roles (e.g., pain). Contrary to the alternative evolutionary explanations for hedonic adaptation (Robson, 2002; Rayo and Becker, 2007), our theory can explain why some sensations are adaptive, while others (with warning/defense roles) are not adaptive at all. Finally, we show that differential adaptation has important welfare and policy implications.

Keywords: hedonic adaptation, evolution, expectations, decision utility, experienced utility

JEL Classification: B52, D03, I00, Z13

Suggested Citation

Perez-Truglia, Ricardo, On the Causes and Consequences of Hedonic Adaptation (May 1, 2010). Available at SSRN: https://ssrn.com/abstract=1448375 or http://dx.doi.org/10.2139/ssrn.1448375

Ricardo Perez-Truglia (Contact Author)

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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