Table of Contents

Handbook on the Economics of Happiness

Handbook on the Economics of Happiness

Elgar original reference

Edited by Luigino Bruni and Pier Luigi Porta

This book is a welcome consolidation and extension of the recent expanding debates on happiness and economics. Happiness and economics, as a new field for research, is now of pivotal interest particularly to welfare economists and psychologists. This Handbook provides an unprecedented forum for discussion of the economic issues relating to happiness. It reviews the more recent literature and offers the interested reader an insight into the vast scope of the field in terms of the theory, its applications and also experimental design. The Handbook also gives substantial indications as to the future direction of research in the field, with particular regard to policy applications and developing an economics of interpersonal relations which includes reciprocity and social interaction theory.

Chapter 16: Happiness, Morality and Game Theory

Luca Zarri

Subjects: economics and finance, economic psychology


Luca Zarri* 1. Introduction As far as contemporary economically advanced societies are concerned, it would be hardly deniable that people’s search for happiness is significantly affected not only by the satisfaction of material needs, but also by several non-material sources such as psychological and social factors, as well as by the pursuit of complex, morally-charged goals, as a growing body of experimental and empirical contributions tends to confirm (see, for example, Easterlin 2001; Fehr and Gächter 2002; Rabin 2002). Recent evidence suggests that money is less and less able to buy happiness and, in this light, Rabin (1993: 1283) correctly remarks: ‘Welfare economics should be concerned not only with the efficient allocation of material goods, but also with designing institutions such that people are happy about the way they interact with others’. These two types of objectives (that is, material and non-material ones) seem to interplay in complex ways; for instance, it is often the case that the pursuit of non-material ends such as the search for social prestige or freedom of choice crucially passes through the attainment of monetary gains. As an example of this, we may think of a status-seeking agent deciding to buy a luxury car or an expensive yacht in order to more effectively signal a given status level (regardless of its reflecting his/her actual social position or not): in the agent’s view, status acts as a source of (positional) utility directly provided by the (instrumental) relationship established with...

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