Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/123392
Authors: 
Frey, Bruno S.
Stutzer, Alois
Year of Publication: 
2008
Series/Report no.: 
WWZ Working Paper 01/08
Abstract: 
A framework is proposed for organizing phenomena related to the (mis)prediction of utility, in particular neglecting adaptation. A categorization is introduced that accounts for asymmetries in misprediction. In decision-making, goods and activities satisfying extrinsic desires are more salient than those serving intrinsic needs. Accordingly, there is an overconsumption of the former compared to the latter. The theoretical analysis is consistent with econometric evidence on commuting choice using data on subjective well-being. People show substantial adaptation to a higher labor income but not to commuting. This may account for the finding that people are not compensated for the burden of commuting.
Subjects: 
adaptation
extrinsic/intrinsic attributes
individual decision-making
misprediction
subjective well-being
time allocation
JEL: 
A12
D11
D12
D84
I31
J22
Document Type: 
Working Paper

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