Hedonic Utility, Loss Aversion and Moral Hazard

Emil P. Iantchev

Foundations and Trends(R) in Microeconomics, 2010, vol. 5, issue 7, 429-475

Abstract: This paper reviews recent advances in the modelling of hedonic utility and the measurement of its physiological correlates. The paper also argues that incorporating hedonic experiences can enrich economic models. An example of such an application — a principal–agent model with moral hazard — is presented and thoroughly analyzed. Its implications are then compared with the structure of incentive contracts observed in practice.

Keywords: Hedonic utility; Principle-agent problem; Loss aversion; Incentive contracts; Moral hazard (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:now:fntmic:0700000041

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