Nudges, which are interventions that do not restrict choice, have become widespread in policy applications. I develop a general and tractable framework to analyze the welfare implications of nudges. In this framework, individuals suffer from internalities (their utility when choosing is...

We posit that feeling constrained impedes happiness. Under this view, utility and happiness maximization yield the same optimal choices in a variety of standard economic decision problems, but utility and happiness can move in opposite directions in response to exogenous shocks. Our theory (i)...

Standard economic analysis assumes that people make choices that maximize their utility. Yet both popular discourse and other fields assume that people sometimes fail to make optimal choices and thus adversely affect their own happiness. Most social sciences thus frequently describe some...

In this paper, we attempt to show why the importance of relational goods compared to conventional goods and status goods threatens to decline in contemporary societies. In our point of view, the development of the relative significance of these three types of goods is not a consequence of...

While research on subjective well-being abounds, comparatively little thought has been given to its practical policy implications. Two approaches to derive policy advice have emerged in the literature: One is organized in terms of the idea to maximize a hedonic social welfare function, the other...

Standard economic analysis assumes that people make choices that maximize their utility. Yet both popular discourse and other fields assume that people sometimes fail to make optimal choices and thus adversely affect their own happiness. Most social sciences thus frequently describe some...

When an individual's preferences depend on the time or 'frame' at which decisions are made, the preferences that appear at different frames must be aggregated in order to make social decisions. Suppose we aggregate each individual i's frame-based preferences with a 'behavioral welfare relation'...

In this paper I discuss the major approaches to happiness in the economics of happiness: Hedonism and life-satisfaction approaches. It is possible to identify a tension between two important principles in this literature: 1) individuals are the best judges of their own happiness, and 2) the...

The aim of this paper is to explain the process of diversification of normative economics by presenting the work of two authors: Tibor Scitovsky [1910-2002] and Amartya Sen [1933-]. While these two authors first contributed to traditional welfare analysis from within, they were subsequently...