We model happiness as a measurement tool used to rank alternative actions. Evolution favors a happiness function that measures the individual’s success in relative terms. The optimal function is based on a time-varying reference point—or performance benchmark—that is updated...

A sender randomly draws a “prospect” characterized by its profitability to the sender and its relevance to a receiver. The receiver observes only a signal provided by the sender and accepts the prospect if his Bayesian inference about the prospect’s relevance exceeds his opportunity cost....

This paper studies how communication allows for the specialized acquisition of knowledge. It shows that a knowledge-based hierarchy is a natural way to organize the acquisition of knowledge when matching problems with those who know how to solve them is costly. In such an organization,...