Determinants of Experienced Utility: Laws and Implications
Decision AnalysisPublished 31 May 2013
Manel Baucells, Rakesh K. Sarin
Citations27
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SJR score0.56
SNIP0.81
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TL;DR
It is shown it is possible to formalize six well-known psychological laws governing satisfaction by means of a utility model and to derive implications from the laws: wanting versus liking, crescendo, recharge periods, variety seeking, and craving.
Abstract
Satisfaction in experiencing the future depends on decisions made today. We consider six well-known psychological laws governing satisfaction. The laws capture habit formation and satiation. We show it is possible to formalize these laws by means of a utility model and to derive implications from the laws: wanting versus liking, crescendo, recharge periods, variety seeking, and craving. The discussion combines mathematical propositions, experimental findings in psychology, and time-honored wisdom. We discuss how the sixth law—projection bias—may lead to incorrect predictions of experienced utility and suboptimal life-balance choices.
Keywords
PsychologyDecision Sciences
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