Subjective Happiness in Behavioral Contracts

Junyi Chai ()
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Junyi Chai: BNU-HKBU United International College

Journal of Happiness Studies, 2023, vol. 24, issue 7, No 5, 2245-2260

Abstract: Abstract This paper studies how payment schemes influence subjective happiness. Self-adaptation and interpersonal comparisons are internal and external determinants of happiness, respectively. We study the influence of contracts on employees' subjective happiness, and further on their willingness-to-work behaviors. We use quantitative manners and prospect theory's gain-loss utility function to measure happiness coming from binary payment schemes. Our analysis predicts the existence of a ratio between the bonus and the payment base, under which people who have a relatively high envy level cannot feel happy all the time. We enlighten how a bonus produces an incentive and point out strategies for extending the time of experiencing happiness. We predict current happiness coming from future outcomes and further measure the overall happiness on a calendar time.

Keywords: Subjective happiness; Binary payments; Bonus contracts; Behavioral contracts; Behavioral decision making (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s10902-023-00678-8

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