Speculatively, people who have never suffered a serious setback at the hands of others may be biased in favor of thinking they are the only ones who exercise control over their own outcomes. That might well explain why they self-report as happier- they're less likely to be inconvenienced!

It sounds like a virtually impossible task to disentangle internal and external factors to see which plays a bigger role, honestly. Any given incident may have causes that come from both camps, and any given event can easily be interpreted either way. As in, were you turned down at the job interview because the HR guy dislikes candidates wearing blue ties, or because you exercised a poor fashion sense decision and wore a blue tie the HR guy didn't like?

The latter attitude of internalizing everything sounds suspiciously like treating everyone else as an NPC...

Does anyone know if chronic narcissists or psychopaths are on average likely to self-report as happier than regular people?