Experiences, Choice and Well-Being: An Economics of Psychological Energy

10 Pages Posted: 6 Jun 2019

See all articles by David Axelrod

David Axelrod

Montclair State University - Economics

Date Written: April 25, 2019

Abstract

This paper proposes an economic model of psychological energy used toward the production of experiences. A review of ideas at the nexus of economics and psychology, and how they lead to the thesis of this paper, is presented. A simple mathematical economic model is developed, with two main uses of psychological energy toward well-being. These are the generation of impressions (inward experiences that are sense-like) and expression (outward experiences that are action-like). Choosing is understood as investing energy to change the probabilities of an outcome. The model optimizes energy use between intensity of impressions and capacity for expression. For a fixed energy level, as experiential intensity increases resources are substituted out of decision making and implementation, leading to choices of lower utility. If the material losses are substantial during an experience, the share of psychological energy used to modify impressions will increase, and away from influencing seemingly random external outcomes. Over multiple periods, this generates a feedback loop where the person feels increasingly disempowered, and thus less concerned about making better choices. This feedback loop can be stopped by an external entity providing sufficient resources for the person to experience greater expression.

Keywords: Impression, Expression, Internal Environment, Poverty Trap

Suggested Citation

Axelrod, David, Experiences, Choice and Well-Being: An Economics of Psychological Energy (April 25, 2019). RAIS Conference Proceedings - The 12th International RAIS Conference on Social Sciences & Humanities. Available at SSRN: https://ssrn.com/abstract=3387481 or http://dx.doi.org/10.2139/ssrn.3387481

David Axelrod (Contact Author)

Montclair State University - Economics ( email )

Montclair, NJ 07043
United States

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