Podcast
Questions and Answers
What is the outcome of spending more time watching TV on happiness?
What is the outcome of spending more time watching TV on happiness?
- There is no correlation between the two
- Happiness increases
- Happiness remains unchanged
- Happiness decreases (correct)
Which of the following is NOT a basic human need?
Which of the following is NOT a basic human need?
- Relatedness
- Pleasure (correct)
- Autonomy
- Competence
What is the relationship between consumption and happiness beyond a certain threshold?
What is the relationship between consumption and happiness beyond a certain threshold?
- The sum of happiness and effort remains unchanged
- The sum of happiness and effort increases
- The sum of happiness and effort becomes negative (correct)
- The sum of happiness and effort decreases
What distinction does Tibor Scitovsky make in his 1976 work?
What distinction does Tibor Scitovsky make in his 1976 work?
What is the primary goal of individuals in the neoclassical economic model?
What is the primary goal of individuals in the neoclassical economic model?
What is the role of relational goods in the happiness equation?
What is the role of relational goods in the happiness equation?
According to the homo oeconomicus model, individuals are characterized by which of the following?
According to the homo oeconomicus model, individuals are characterized by which of the following?
What is the name of the zone where the relationship between happiness and income breaks down?
What is the name of the zone where the relationship between happiness and income breaks down?
What is the main finding of the Easterlin Paradox?
What is the main finding of the Easterlin Paradox?
How is happiness typically measured in surveys?
How is happiness typically measured in surveys?
What is the relationship between GDP growth and happiness, according to the Easterlin Paradox?
What is the relationship between GDP growth and happiness, according to the Easterlin Paradox?
What is the key assumption about preferences in the neoclassical economic model?
What is the key assumption about preferences in the neoclassical economic model?
What is a common phenomenon observed in human behavior, as described in the World Happiness Report?
What is a common phenomenon observed in human behavior, as described in the World Happiness Report?
According to the Homo Psychologicus concept, what is a characteristic of human behavior?
According to the Homo Psychologicus concept, what is a characteristic of human behavior?
What is the main issue with economics, as described in the relational perspective?
What is the main issue with economics, as described in the relational perspective?
What is the consequence of placing too much weight on the present over the future, according to the World Happiness Report?
What is the consequence of placing too much weight on the present over the future, according to the World Happiness Report?
What is the term used to describe the phenomenon where economic incentives can undermine intrinsic motivations?
What is the term used to describe the phenomenon where economic incentives can undermine intrinsic motivations?
What is the name of the game that demonstrates the pro-social behavior of humans, according to the Homo Psychologicus concept?
What is the name of the game that demonstrates the pro-social behavior of humans, according to the Homo Psychologicus concept?
According to the Easterlin Paradox, the GDP in the US decreased from 1973 to 2003.
According to the Easterlin Paradox, the GDP in the US decreased from 1973 to 2003.
The Homo Oeconomicus model assumes that individuals are perfectly rational and have perfect self-control.
The Homo Oeconomicus model assumes that individuals are perfectly rational and have perfect self-control.
The primary goal of individuals in the neoclassical economic model is to pursue social preferences.
The primary goal of individuals in the neoclassical economic model is to pursue social preferences.
Happiness is typically measured in surveys using a scale of 1 to 100.
Happiness is typically measured in surveys using a scale of 1 to 100.
The Easterlin Paradox suggests that additional income always leads to additional happiness.
The Easterlin Paradox suggests that additional income always leads to additional happiness.
The neoclassical economic model assumes that individuals have incomplete preferences.
The neoclassical economic model assumes that individuals have incomplete preferences.
Humans always make decisions that are consistent with their long-term goals.
Humans always make decisions that are consistent with their long-term goals.
Economic incentives always increase human motivation.
Economic incentives always increase human motivation.
The World Happiness Report finds that people's happiness increases indefinitely with their income.
The World Happiness Report finds that people's happiness increases indefinitely with their income.
Homo Psychologicus is a concept that assumes humans are purely self-interested.
Homo Psychologicus is a concept that assumes humans are purely self-interested.
The relational perspective in economics views markets and firms as isolated entities.
The relational perspective in economics views markets and firms as isolated entities.
The Ultimatum Game is a study that demonstrates humans' selfish behavior.
The Ultimatum Game is a study that demonstrates humans' selfish behavior.
Relational goods are not affected by the contribution of others.
Relational goods are not affected by the contribution of others.
The utility of comfort goods is normally increasing.
The utility of comfort goods is normally increasing.
Watching TV can increase happiness due to the acquisition of relational goods.
Watching TV can increase happiness due to the acquisition of relational goods.
The happiness equation only considers consumption and relational goods.
The happiness equation only considers consumption and relational goods.
The concept of 'relatedness' is not a basic human need.
The concept of 'relatedness' is not a basic human need.
The happiness-income curve is always positively sloped.
The happiness-income curve is always positively sloped.
What is the fundamental assumption about human behavior in the neoclassical economic model?
What is the fundamental assumption about human behavior in the neoclassical economic model?
What is the main finding of the Easterlin Paradox, and what are its implications for the relationship between income and happiness?
What is the main finding of the Easterlin Paradox, and what are its implications for the relationship between income and happiness?
How do neoclassical economists typically measure happiness, and what are the limitations of this approach?
How do neoclassical economists typically measure happiness, and what are the limitations of this approach?
What are the key characteristics of Homo oeconomicus, and how do they differ from real-world human behavior?
What are the key characteristics of Homo oeconomicus, and how do they differ from real-world human behavior?
What is the significance of the distinction between comfort goods and relational goods in the economy of happiness?
What is the significance of the distinction between comfort goods and relational goods in the economy of happiness?
What are the implications of the Easterlin Paradox for economic policy and our understanding of human well-being?
What are the implications of the Easterlin Paradox for economic policy and our understanding of human well-being?
What does the concept of Homo Psychologicus suggest about human behavior, in contrast to the Homo Oeconomicus model?
What does the concept of Homo Psychologicus suggest about human behavior, in contrast to the Homo Oeconomicus model?
How does the relational perspective in economics differ from traditional economic views?
How does the relational perspective in economics differ from traditional economic views?
What is the main finding of the Easterlin Paradox, and what are its implications for economic policy?
What is the main finding of the Easterlin Paradox, and what are its implications for economic policy?
What does the concept of 'crowding out' refer to in the context of economic incentives and motivation?
What does the concept of 'crowding out' refer to in the context of economic incentives and motivation?
How does the World Happiness Report define happiness, and what are some of the key factors that contribute to it?
How does the World Happiness Report define happiness, and what are some of the key factors that contribute to it?
What do the Dictator Game and Ultimatum Game reveal about human behavior, and how do these findings challenge traditional economic models?
What do the Dictator Game and Ultimatum Game reveal about human behavior, and how do these findings challenge traditional economic models?
What is the main implication of the Easterlin Paradox in the context of happiness and income?
What is the main implication of the Easterlin Paradox in the context of happiness and income?
What is the distinction made by Tibor Scitovsky in his 1976 work, in relation to the economy of happiness?
What is the distinction made by Tibor Scitovsky in his 1976 work, in relation to the economy of happiness?
How does the inclusion of relational goods affect the happiness equation, according to the relational perspective?
How does the inclusion of relational goods affect the happiness equation, according to the relational perspective?
What is the significance of the concept of 'relatedness' in the context of human needs and happiness?
What is the significance of the concept of 'relatedness' in the context of human needs and happiness?
How does the World Happiness Report measure happiness, and what is the significance of this measurement?
How does the World Happiness Report measure happiness, and what is the significance of this measurement?
What is the implication of the 'treadmill effect' on the relationship between consumption and happiness?
What is the implication of the 'treadmill effect' on the relationship between consumption and happiness?
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Study Notes
Relational Goods and Happiness
- Homo oeconomicus: an economic model that assumes individuals pursue the maximization of their personal utility, are perfectly rational, have perfect self-control, and are perfectly self-interested.
- Economic science and utilitarianism are deeply connected, with the goal of maximizing utility.
- Homo oeconomicus has a set of preferences that are: complete, transitive, and monotonous.
Measuring Happiness
- Happiness can be measured on a scale of 1 to 10, with questions such as "Overall, how happy do you feel on a scale of 1 to 10?"
- Alternative measures of happiness include "Currently, how satisfied are you with your life as a whole?" on a scale of 1 to 10.
The Easterlin Paradox
- The Easterlin paradox states that, despite a doubling of GDP in the US from 1973 to 2003, happiness levels remained constant.
- Beyond a certain subsistence income level, additional income does not lead to additional happiness.
- The paradox suggests that there may be a limit to the happiness gains from increased income.
Relational Goods
- Relational goods refer to the positive relationships and interactions between individuals.
- Examples of relational goods include time spent with friends and family, volunteering, and community engagement.
- Relational goods can contribute to happiness and well-being, but may be crowded out by extrinsic activities such as watching TV.
Alternative Models of Human Behavior
- Homo psychologicus: a model that recognizes that humans are not perfectly rational, and may have cognitive limitations and biases.
- Homo psychologicus may exhibit procrastination, placing too much weight on the present over the future, and may have inconsistent preferences.
- Homo socialis: a model that recognizes that humans are social beings, and may have a preference for social interactions and relationships.
The Importance of Relationality
- Economics can be understood as the study of interactions among individuals, and markets, firms, and prices can be seen as networks of relationships.
- The key issue is not whether economics recognizes relationality, but rather why economics is poor in analyzing dimensions of relationality beyond the instrumental ones.
- Relational goods and relationships can have a significant impact on happiness and well-being, and should be considered in economic models.
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