Saturday, January 22, 2005

Rivalry and habituation

I've been reading a bit about rivalrous behavior and the "hedonic treadmill" lately. For nice expository papers see the Web page of Richard Layard, an LSE economist who has a new book on the economics of happiness.

The hedonic treadmill is based on the idea of habituation. If your life improves (e.g., move into a nicer house, get a better job, become rich), you feel better at first, but rapidly grow accustomed to the improvement and soon want even more. This puts you on a treadmill from which it is difficult to escape. (Of course, habituation can be a good thing: after a traumatic event (e.g., loss of job, or limb, or loved one), you feel terrible at first but after a while can go on with your life.) Incidentally, I know a lot of former physicists now on Wall Street, who provide a nice example of habituation. Most go into finance thinking of a particular "number" (net worth) they want to reach in order to retire. But, their lifestyle requirements and therefore number tend to increase along with compensation, making escape difficult.

Layard believes people work too much, are too obsessed with money, and take too little leisure. In addition to habituation, another cause of this is so-called rivalrous behavior, in which our happiness depends on how our situation compares with a reference group of peers (co-workers, neighbors, family members, etc.). As an example of rivalrous behavior, people asked questions such as: "Which would you prefer: your salary is $50K per year, but your peers make $25K, or your salary is $100K per year, and your peers' $200K?" generally prefer the former, even though they would be worse off in absolute terms. However, people are not rivalrous when it comes to leisure: when asked a similar question about vacation, most people prefer the choice which gives them the most vacation, regardless of how much their peers are allowed. If you consider these results, it suggests that people would be happier in a society that is (a) more egalitarian and (b) offers more leisure, even if they are not as materially wealthy. As a Labour MP, you might imagine Layard would prefer this European economic model over the nasty US one, but he does have some interesting data supporting his assertions.

Without specifically endorsing Layard's policy recommendations, I can agree that habituation and rivalry abound. Most PhD students dream of becoming tenured professors, not realizing how rapidly the resulting glow can fade into petty competition over salary or citations. Many young entrepreneurs or financiers imagine happiness is guaranteed upon achieving millionaire status, only to realize that their new peer group comes with even wealthier, more successful, rivals.

13 comments:

Anonymous said...

Ah, now you issue an implied challenge. Competition forever, so the spice to life will stay spicy. Hmmm, but i still like my parrotlet even though your is no doubt much more physically astute :) Engage we surely must.

Anne

Anonymous said...

An aside:

http://www.nytimes.com/2005/01/22/international/asia/22zhao.html?pagewanted=all&position=

For Beijing Students Now, Protests Aren't Even a Memory
By JIM YARDLEY

BEIJING - For Yu Yang, a mop-haired biology major, the small notice posted this week on Beijing University's Web site about the death of a former Communist Party leader seemed like an irrelevant historical footnote.

Growing up, Mr. Yu, now 21, barely knew about Zhao Ziyang, except that he had 'played a prominent role in 1989.' And Mr. Yu acknowledged Thursday that he barely knew about 1989. He knew students had protested at Tiananmen Square; he had heard that Chinese soldiers fired into the crowds to end the demonstrations.

But Mr. Yu, an aspiring scientist, described that as hearsay. 'Rumors say so,' he said of a bloody crackdown witnessed by a worldwide television audience outside China, 'but I need a lot of evidence to believe it.'

Anne

Anonymous said...

Does this mean, by the way, that I actually have to care who wins the playoffs? Could it mean the reverse? But, of course, I do not care already. Life is so drab if I let just let you win, but what do I know about little physicals or big :)

Anne

Anonymous said...

Another aside, I will be much chastised: The New York Times has another sensational critic.

http://www.nytimes.com/2005/01/21/movies/21head.html?ex=1107345231&ei=1&en=fc59e449f9f2e103

Janaury 21, 2005

Two Misplaced Souls Decide They Might as Well Live
By MANOHLA DARGIS

Love doesn't just hurt in the jagged German romance "Head-On"; it cuts and bleeds and even kills. A story about a lonely man and a still-lonelier woman fighting against their worlds and what often seems like their own best interests, the film has caused a stir in Germany for the murky, troubling light it sheds on the lives of the country's Turkish immigrants. Its popularity made it a fleeting social phenomenon and a minor cultural footnote. But it doesn't explain why this film about two strangers with suicidal tendencies and a deep commitment to self-aggrandizing drama is the first very good movie of this very young year.

Anne

steve said...

It is terrifying to think that college students in China no longer know what happened at Tiananmen...

Hmm, it seems my interest in the economics of happiness is not shared by others :-)

Anonymous said...

An interesting article similar to this is:

http://slate.msn.com/id/1915
The CPI and the Rat Race
New evidence on the old question of whether money buys happiness.
By Paul Krugman
Posted Sunday, Dec. 22, 1996, at 12:30 AM PT


Actually, (not intending to sound pompous) I honestly think I have been able to get off the hedonic treadmill; and I have seen a few others too. When in grad school, I had certain material expectations for the future, and, most importantly, stay out of debt. I am close to achieving all of them, and hence could not be happier! My spending habits have not changed much since grad school, though I earn a lot more. I spend more only on certain things (books, pc (someday maybe get a Mac :)),cable tv). It helps that I loathe travelling :)

I think there are two reasons:

* The problem is more acute in the US, which has an intensely competitive culture.

* `An empty mind is a devil's workshop'. I (and other people I know not 'keeping up with the Joneses') just don not have the time to think about how they are relative to others. There is so much exciting stuff to do and learn about!

I think people ultimately forget that money should be one's slave, not the other way around.


MFA

Anonymous said...

Regarding Tiannenmen, I believe it was looked at very differently by people in China than elsewhere. Based on thier historical experience with the West, Western symbols and slogans have different interpretations.

I remember talking to a Chinese grad student, who thought that the majority view in China then (1989) was that the protesters had to be removed because they were holding the country hostage. What they differed was in whether Deng handled it properly; could have been done with much less bloodshed.

Henry Kissinger, a lobbyist for China, made a point quite similar on Charlie Rose. He drew an analogy: "what would the govt. reaction be in any western country, if there were thousands of protestors carrying communist sysmbols and preventing govt. business being carried out for weeks? They would have taken care of it."

MFA

Anonymous said...

Hmm, it seems my interest in the economics of happiness is not shared by others :-)

Actually the topic is interesting, and I enjoyed the comment by MFA and rather think we are alike in taste. Should we then be more competitive? I will think about this.

Anne

steve said...

MFA,

I think I've also managed to keep a slow pace of habituation. For example, I still drive the car I bought as a grad student - quite a sight when parked in the lot on Sand Hill Road with all the VC porsches and mercedes! This is not so surprising for academics in academia, although people who left for finance are a different matter.

There are some things which are quite appealing, but were out of reach in the past, like flying first class on long international flights (being able to lie down and sleep!), staying in decent hotels, etc.

I think rivalrous thinking is much more dangerous for academics. I see petty stuff all the time within my subfield or inside my department.

Anonymous said...

Steve and Anne: I am happy to be in such good company! :)

Steve,

I agree that the pressure is even more intense in academia. I could sense some of it when in grad school, so decided I would be better off getting my Ph.D. (after learning QFT),and then heading off to industry/engineering. It helped that the SSC was cancelled. I really did not want to be a part of the "publish or perish" atmosphere, especially when theer was really nothing to say. Hence, it is EVEN MORE impressive that you are what you are.

BTW, I really want to commend you on your blog. I find it amazing how you can bring up such diverse topics (form economics to physics to VOIP), and now your blog is what I read first every day.

Anonymous said...

Pleasing company, indeed :) I have been reading about boreal owls, at least a boreal owl who managed to find a home for a time in a Central Park tree. Think about owls flying through the night with no wing sound. Ah, design.

Anne

steve said...

MFA,

Thank you for the kind words on the blog - I think it reflects the fact that (as my colleagues might say) my interests are a bit *too* broad :-)

I was lobbying to save the SSC while a postdoc. A well-known string theorist, with whom I used to argue about phenomenology (I hate that term) vs string theory, asked me "what are you going to do if they kill the SSC?" Without hesitation, I replied "If they kill the SSC I am leaving for Wall St." But, for better or worse, I didn't make good on my promise :-)

DB said...

The "hedonic treadmill" made the WSJ again today (3/6/06, p.B1), in an article about people's expectations of happiness.

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