Inspired by: The Black Swan and MoreNewMath

http://www.nytimes.com/2009/08/19/opinion/19buffett.html?pagewanted=1&_r=1&ref=opinion

In my initial post on Hacking the Hedonic Treadmill I discussed the concept of Adaptation Level Theory and how happiness for all effective purposes is a relative, not an absolute measure of well-being and satisfaction.

Well, as it turns out, how we measure our own happiness is also a matter of relative scale.

Download: Deconstructing the Hedonic Treadmill, by Nicolas Luis Bottan and Ricardo Pérez Trugliag from the Department of Economics, Universidad de San Andrés and Harvard University.

The Theory

Not only is our personal happiness subject to “leveling off” effects after changes from positive or negative stimuli, it also appears as though the scale with which we judge our own happiness is subject to relative scale.

We propose a subtle but important difference: raising today’s consumption may worsen tomorrow’s well-being not only because individuals will desire a higher level of consumption, but partly because having experienced moments of happiness today will make them more prone to feelings of unhappiness tomorrow. That is, happiness itself may be adaptive.

Evolution and The Hedonic Treadmill

When economists formulate an individual’s utility function, its level does not make much sense: for example, it could be normalized to some value arbitrarily close to zero. But in the real world we observe that stimuli do make sense in absolute value. Our explanation is related to the fact that some stimuli serve secondary functions different to that of providing relative incentives (e.g. pain serves as an alert system), and therefore Nature can not “multiply” these by an arbitrarily small number without incurring in an efficiency cost. Furthermore, a very strong stimulus has fitness costs: feeling extreme pain or pleasure would not let an individual function normally. In order to minimize such fitness costs, Nature may have developed an adaptive “utility function”.

Why is this?

People that walked around all day with either constant orgasms or terrible pain would not be possibly able to perform well in everyday life.

The quest for happiness is thought as the main concern of every individual. Nevertheless, we must bear in mind that happiness has been an evolutive means and not an end for the human race: Nature developed an incentive scheme of prizes and punishments to drive human behavior towards maximum performance. Think of evolution itself as a central planner who chooses the utility function maximized by individuals in such a way as to maximize Nature’s own utility: reproduction and survival of the species

What is the “Scale Treadmill”?

The Scale Treadmill is the framework with which we judge our own level of happiness. Since it is hard to judge happiness in an absolute sense, we are likely to use a scale to compare our level of happiness with our perceived levels of happiness of those around us.

Let’s suppose that a level of happiness exists (H), defined as an arrangement of electronic impulses in the brain which individuals perceive. But this perception cannot be transformed into a number to answer “How is life overall?”, reason behind the need to place this value in a scale. That is, individuals really respond “How is life compared to sometime/someone?”.

So, given this paradox of happiness where past happiness colors our future happiness and no perceived gains are to be had in long term happiness levels, what then is one to do to maximize his/her happiness function?

Option 1: Endless NoveltyBy always trying new things it becomes harder to acclimate and in theory you will always be happy.