Happiness Research: State and Prospects

Bruno Frey

No 192, IEW - Working Papers from Institute for Empirical Research in Economics - University of Zurich

Abstract: Distortions in memory impose important bounds on rationality but have been largely disregarded in economics. While it is possible to learn, it is more difficult, and sometimes impossible, to unlearn. This retention effect lowers individual utility directly or via reduced productivity, and adds costs to principal-agent relationships. The imprinting effect states that the more one tries to forget a piece of information the more vivid it stays in memory, leading to a paradoxical outcome. The effects are based on, and are supported by, psychological experiments, and it is shown that they are relevant in many economic situations and beyond.

Keywords: Memory; bounded rationality; learning; retention; ironic process theory; principalagency theory (search for similar items in EconPapers)
JEL-codes: D11 D83 J2 M20 Z00 (search for similar items in EconPapers)
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Citations: View citations in EconPapers (109)

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Related works:
Journal Article: Happiness Research: State and Prospects (2005)
Working Paper: Happiness Research: State and Prospects (2004)
Working Paper: Happiness Research: State and Prospects
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