Not Available for Download

Evolutionary Efficiency and Happiness

Posted: 23 Apr 2007  

Luis Rayo

University of Chicago - Booth School of Business

Gary S. Becker

University of Chicago - Department of Economics; University of Chicago - Booth School of Business

Abstract

We model happiness as a measurement tool used to rank alternative actions. Evolution favors a happiness function that measures the individual's success in relative terms. The optimal function is based on a time-varying reference point - or performance benchmark - that is updated over time in a statistically optimal way in order to match the individual's potential. Habits and peer comparisons arise as special cases of such an updating process. This updating also results in a volatile level of happiness that continuously reverts to its long-term mean. Throughout, we draw a parallel with a problem of optimal incentives, which allows us to apply statistical insights from agency theory to the study of happiness.

Suggested Citation

Rayo, Luis and Becker, Gary S., Evolutionary Efficiency and Happiness. Journal of Political Economy, Vol. 115, April 2007. Available at SSRN: https://ssrn.com/abstract=981450

Luis Rayo (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Gary S. Becker

University of Chicago - Department of Economics ( email )

1126 East 59th Street
Chicago, IL 60637
United States

University of Chicago - Booth School of Business

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Paper statistics

Abstract Views
2,087