Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/58506 
Year of Publication: 
2012
Series/Report no.: 
IZA Discussion Papers No. 6346
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Standard economic analysis assumes that people make choices that maximize their utility. Yet both popular discourse and other fields assume that people sometimes fail to make optimal choices and thus adversely affect their own happiness. Most social sciences thus frequently describe some patterns of decision as suboptimal. We review evidence of suboptimal choices that arise for two reasons. First, people err in predicting the utility they may accrue from available choice options due to the evaluation mode. Second, people choose on the basis of salient rules that are unlikely to maximize utility. Our review is meant to highlight the possibility of a research program that combines economic analysis with measures of experienced individual well-being to improve people's happiness.
Subjects: 
suboptimal choice
individual well-being
experienced utility
evaluation mode
salient rule
utility misprediction
JEL: 
D01
D11
D60
D91
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
465.91 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.