A model of ambition, aspiration and happiness

Junyi Chai

European Journal of Operational Research, 2021, vol. 288, issue 2, 692-702

Abstract: Can payoffs buy happiness? People's perception on their current payoffs depends on the social context and the historical context. This paper develops a utility model that captures both effects of interpersonal comparisons and self-adaptations in evaluating time streams of payoffs. Moment utility represents subjective happiness over payoffs, which hinges on three state variables: retaliation, aspiration, and ambition. Retaliation incorporates insights of fairness thinking and formulates people's psychological reaction on relative payoff comparisons interpersonally. Aspiration displays habit formation that formulates people's self-adaptation on their own history of payoffs. Ambition captures the net influence of the past situations to the present. Over a time window, our model delivers a new measure of individual well-being under both social and historical contexts.

Keywords: Behavioral OR; Fairness; Ambition; Happiness; Well Being (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:288:y:2021:i:2:p:692-702

DOI: 10.1016/j.ejor.2020.06.009

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