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Buying happiness

-2 gjm 16 June 2016 05:08PM

There's a semi-famous paper by Dunn, Gilbert and Wilson: "If money doesn't make you happy, then you probably aren't spending it right". (Proper reference: Dunn, E.W., Gilbert, D.T., and Wilson, T.D., If money doesn't make you happy, then you probably aren't spending it right, Journal of Consumer Psychology, vol 21, issue 2, April 2011, pp. 115–125.) It's been referenced a few times on LW but curiously never written up properly here. The purpose of this post is to remedy that.

There is an earlier LW post called "Be Happier" which among other things references this paper and quotes some things it says, but that post is monstrously long and covers a lot more ground (hence, less details on the material in this paper).

Dunn, Gilbert and Wilson (hereafter "DGW") offer eight principles to follow. Here they are.

1. Buy experiences instead of things.

Many studies have asked people to reflect on past "material" and/or "experiential" purchases and have consistently found that they report greater happiness from (and are made happier by recalling) the latter than the former.

Why? DGW propose 5 reasons. First, deliberately sought-out experiences encourage us to focus on the here and now (something shown to increase happiness substantially); second, when things don't change we adapt to them rapidly, and "material" purchases like cars and tables tend to be pretty stable (whereas ongoing experiences are more varied); third, it turns out that people spend more time anticipating experiences before they happen and recalling them afterwards than they do for material purchases. Fourth, experiences are less directly comparable to alternatives than material things, and therefore less subject to post-purchase regret. Fifth, experiences are often shared, and other people are a great source of happiness.

2. Help others instead of yourself.

Prosocial spending correlates better to happiness than personal spending. If you give random people money and either tell them to spend it on themselves or to spend it on someone else, the latter makes them happier. Reflecting on past spending-on-others makes people happier than reflecting on past spending-on-self. (I am a little skeptical about that one: the right point of comparison would be not the past spending but the past enjoyment of whatever you spent the money on.)

Why? DGW propose two reasons. First, prosocial spending is good for relationships and relationships are good for happiness. Second, when you spend on someone else you get to feel like a good person.

Most people have wrong intuitions about this: they expect spending on themselves to make them happier. Most people are wrong.

3. Buy many small pleasures instead of few big ones.

As we saw above under #1, we quickly adapt to changes. Therefore, a larger number of varied small pleasures may be a better buy than a single big one. There is some evidence for this (though to my mind it seems to bear less directly on DGW's principle than in the other cases we've considered so far). If you correlate people's happiness with their positive experiences, the correlation with how frequent those experiences are is stronger than the correlation with how intense they are. The optimal (for happiness) number of sexual partners to have over a year is one, perhaps because that gets you more sex even if individual instances are less exciting. (I find this less than convincing; individual instances might be better because partners learn what works well for them.)

The other reason DGW suggest why more smaller things should be better is diminishing marginal utility: half a cookie is more than half as good as a whole cookie. (This is, I think, partly because of adaptation, but that isn't the whole story.)

DGW suggest that this is one reason why the relationship between wealth and happiness isn't stronger: "wealth promises access to peak experiences, which in turn undermine the ability to savor small pleasures".

4. Buy less insurance.

We adapt to bad things as well as good, which means that bad things are less bad than we are liable to expect. Our overestimation of the impact of adverse occurrences is one reason why we buy insurance, which notoriously is always negative-expectation in monetary terms.

DGW cite various studies showing that people expect to be made markedly unhappier by losses than they actually are if the losses occur, and that people expect to regret bad outcomes more than they actually do (we overestimate how much we will blame ourselves, because we underestimate how good we are at blaming anything and anyone else for our misfortunes).

5. Pay now and consume later.

The opposite of the bargain proposed by credit cards! Besides the purely financial problems that arise from overspending (which are large and widespread), DGW suggest that "consume now, pay later" is bad for our happiness because it eliminates anticipation. We may derive a lot of pleasure even from anticipating something that we don't enjoy very much when it happens. "People who devote time to anticipating enjoyable experiences report being happier in general."

You might think that moving an experience later would simply mean more anticipation (good) but less reminiscence (bad), but it turns out that anticipation generally brings more happiness. (And, for unpleasant events, more pain.)

DGW suggest two other benefits of delaying consumption. First, we may make better choices (meaning, in this case, ones yielding more happiness overall, even if less in the very short term) when we make them a little way ahead. Second, the delay may increase uncertainty, which may keep attention focused on the thing we're buying, which may reduce adaptation. (This seems a little convoluted to me; DGW cite some research backing it up but I'm not sure it backs up the "by reducing adaptation" part of it.)

6. Think about what you're not thinking about.

That is: when choosing what to spend on, take some time to consider less obvious aspects that you'd otherwise be tempted to neglect. "The bigger home may seem like a better deal, but if the fixer-upper requires trading Saturday afternoons with friends for Saturday afternoons with plumbers, it may not be such a good deal after all." And: "consumers who expect a single purchase to have a lasting impact on their happiness might make more realistic predictions if they simply thought about a typical day in their life." (Rather than considering only the small bits of that day that will be impacted by their purchase.)

7. Beware of comparison shopping.

Comparison shopping, say DGW, focuses attention on the features that most clearly distinguish candidate purchases from one another, whereas other more-common features may actually have much more impact on happiness. It may also focus attention on more-concrete differences; for instance, if you ask people whether they would more enjoy a small heart-shaped chocolate or a large cockroach-shaped one, they generally prefer the former, but if you ask them to choose one of the two they tend to focus on the size and choose the latter.

DGW also point out that the context during comparison-shopping tends to be different from that during actual consumption, which can skew our evaluations.

8. Follow the herd instead of your head.

DGW cite research supporting de la Rochefoucauld's advice: "Before we set our hearts too much upon anything, let us first examine how happy those are who already possess it." Others' actual experiences of a thing are likely to be better predictors of our enjoyment than our theoretical estimates: we may know ourselves better, but they know the thing better.

They also suggest (and I don't think this really fits their heading) looking to others for advice on how we would enjoy something we are considering buying. The example they give is of research in which subjects were shown some foods and asked to estimate how much they would enjoy them, after which they ate them and evaluated their actual enjoyment. The wrinkle is that they were also observed, at the moment of being shown the foods, by other observers, who rated their immediate facial reactions -- which turned out to be better predictors of their enjoyment than the subjects' own assessments. So "other people may provide a useful source of information about the products that will bring us joy because they can see the nonverbal reactions that may escape our own notice".

AlphaGo versus Lee Sedol

17 gjm 09 March 2016 12:22PM

There have been a couple of brief discussions of this in the Open Thread, but it seems likely to generate more so here's a place for it.

The original paper in Nature about AlphaGo.

Google Asia Pacific blog, where results will be posted. DeepMind's YouTube channel, where the games are being live-streamed.

Discussion on Hacker News after AlphaGo's win of the first game.

[LINK] "The current state of machine intelligence"

3 gjm 16 December 2015 03:22PM

This article by Shivon Zilis on O'Reilly's website may be of interest. There's essentially no technical content (I think the author is a finance person with little technical expertise); it's a fairly fluffy high-level survey of the ecosystem, asking questions more like "what companies are doing this stuff and what are their products?" than like "what scientific advances have there been and how do they work inside?".

Here are a few quotations to give the flavour of the thing:

The two biggest changes I’ve noted since I did this analysis last year are (1) the emergence of autonomous systems in both the physical and virtual world and (2) startups shifting away from building broad technology platforms to focusing on solving specific business problems.

In last year’s roundup, the focus was almost exclusively on machine intelligence in the virtual world. This time we’re seeing it in the physical world, in the many flavors of autonomous systems: self-driving cars, autopilot drones, robots that can perform dynamic tasks without every action being hard coded. It’s still very early days—most of these systems are just barely useful, though we expect that to change quickly.

Similarly, researchers are doing things that make us stop and say, “Wait, really?” They are tackling important problems we may not have imagined were possible, like creating fairy godmother drones to help the elderly, computer vision that detects the subtle signs of PTSD, autonomous surgical robots that remove cancerous lesions, and fixing airplane WiFi (just kidding, not even machine intelligence can do that).

(Warning: one link in the last paragraph is to an article in the Daily Mail, which is a terrible terrible newspaper.)

[LINK] Scott Aaronson: Common knowledge and Aumann's agreement theorem

13 gjm 17 August 2015 08:41AM

The excellent Scott Aaronson has posted on his blog a version of a talk he recently gave at SPARC, about Aumann's agreement theorem and related topics. I think a substantial fraction of LW readers would enjoy it. As well as stating Aumann's theorem and explaining why it's true, the article discusses other instances where the idea of "common knowledge" (the assumption that does a lot of the work in the AAT) is important, and offers some interesting thoughts on the practical applicability (if any) of the AAT.

(Possibly relevant: an earlier LW discussion of AAT.)

Group Rationality Diary, March 22 to April 4

6 gjm 23 March 2015 12:17PM

This is the public group rationality diary for March 22 - April 4, 2015. Here's the usual summary of what it's about:

It's a place to record and chat about it if you have done, or are actively doing, things like: 

  • Established a useful new habit
  • Obtained new evidence that made you change your mind about some belief
  • Decided to behave in a different way in some set of situations
  • Optimized some part of a common routine or cached behavior
  • Consciously changed your emotions or affect with respect to something
  • Consciously pursued new valuable information about something that could make a big difference in your life
  • Learned something new about your beliefs, behavior, or life that surprised you
  • Tried doing any of the above and failed

Or anything else interesting which you want to share, so that other people can think about it, and perhaps be inspired to take action themselves. Try to include enough details so that everyone can use each other's experiences to learn about what tends to work out, and what doesn't tend to work out.

Thanks to cata for starting the Group Rationality Diary posts, and to commenters for participating.

Previous diary: February 15-28

Rationality diaries archive

Group Rationality Diary, March 1-21

4 gjm 06 March 2015 03:29PM

This is the public group rationality diary for March 1-21, 2015. It seems to be traditional to put a jokily defensive remark about downvoting here, but let's try omitting it and see what happens. Usually these are for 2-week periods, but as I write this it's already the 6th so I've extended it one week; but I recommend that the next be for 2 weeks again, March 22 to April 4. Here's the usual explanation:

It's a place to record and chat about it if you have done, or are actively doing, things like: 

  • Established a useful new habit
  • Obtained new evidence that made you change your mind about some belief
  • Decided to behave in a different way in some set of situations
  • Optimized some part of a common routine or cached behavior
  • Consciously changed your emotions or affect with respect to something
  • Consciously pursued new valuable information about something that could make a big difference in your life
  • Learned something new about your beliefs, behavior, or life that surprised you
  • Tried doing any of the above and failed

Or anything else interesting which you want to share, so that other people can think about it, and perhaps be inspired to take action themselves. Try to include enough details so that everyone can use each other's experiences to learn about what tends to work out, and what doesn't tend to work out.

Thanks to cata for starting the Group Rationality Diary posts, and to commenters for participating.

Previous diary: February 15-28

Rationality diaries archive

Open thread, September 15-21, 2014

6 gjm 15 September 2014 12:24PM

If it's worth saying, but not worth its own post (even in Discussion), then it goes here.


Notes for future OT posters:

1. Please add the 'open_thread' tag.

2. Check if there is an active Open Thread before posting a new one. (Immediately before; refresh the list-of-threads page before posting.)

3. Open Threads should be posted in Discussion, and not Main.

4. Open Threads should start on Monday, and end on Sunday.

Proportional Giving

10 gjm 02 March 2014 09:09PM

Executive summary: The practice of giving a fixed fraction of one's income to charity is near-universal but possibly indefensible. I describe one approach that certainly doesn't defend it, speculate vaguely about a possible way of fixing it up, and invite better ideas from others.


Many of us give a certain fraction of our income to charitable causes. This sort of practice has a long history:

Deuteronomy 14:22 Thou shalt truly tithe all the increase of thy seed, that the field bringeth forth year by year.

(note that "tithe" here means "give one-tenth of") and is widely practised today:

GWWC Pledge: I recognise that I can use part of my income to do a significant amount of good in the developing world. Since I can live well enough on a smaller income, I pledge that from today until the day I retire, I shall give at least ten percent of what I earn to whichever organizations can most effectively use it to help people in developing countries. I make this pledge freely, openly, and without regret.

And of course it's roughly how typical taxation systems (which are kinda-sorta like charitable donation, if you squint) operate. But does it make sense? Is there some underlying principle from which a policy of giving away a certain fraction of one's income (not necessarily the traditional 10%, of course) follows?

The most obvious candidate for such a principle would be what we might call

Weighted Utilitarianism: Act so as to maximize a weighted sum of utility, where (e.g.) one's own utility may be weighted much higher than that of random far-away people.

But this can't produce anything remotely like a policy of proportional giving. Assuming you aren't giving away many millions per year (which is a fair assumption if you're thinking in terms of a fraction of your salary) then the level of utility-per-unit-money achievable by your giving is basically independent of what you give, and so is the weight you attach to the utility of the beneficiaries.

So suppose that when your income, after taking out donations, is $X, your utility (all else equal) is u(X), so that your utility per marginal dollar is u'(X); and suppose you attach weight 1 to your own utility and weight w to that of the people who'd benefit from your donations; and suppose their gain in utility per marginal dollar given is t. Then when your income is S you will set your giving g so that u'(S-g) = wt.

What this says is that a weighted-utilitarian should keep a fixed absolute amount S-g of his or her income, and give all the rest away. The fixed absolute amount will depend on the weight w (hence, on exactly which people are benefited by the donations) and on the utility per dollar given t (hence, on exactly what charities are serving them and how severe their need is), but not on the person's pre-donation income S.

(Here's a quick oversimplified example. Suppose that utility is proportional to log(income), that the people your donations will help have an income equivalent to $1k/year, that you care 100x more about your utility than about theirs, and that your donations are the equivalent of direct cash transfers to those people. Then u' = 1/income, so you should keep everything up to $100k/year and give the rest away. The generalization to other weighting factors and beneficiary incomes should be obvious.)

This argument seems reasonably watertight given its premises, but proportional giving is so well-established a phenomenon that we might reasonably trust our predisposition in its favour more than our arguments against. Can we salvage it somehow?

Here's one possibility. One effect of income is (supposedly) to incentivize work, and maybe (mumble near mode mumble) this effect is governed entirely by anticipated personal utility and not by any benefit conferred on others. Then the policy derived above, which above the threshold makes personal utility independent of effort, would lead to minimum effort and hence maybe less net weighted utility than could be attained with a different policy. Does this lead to anything like proportional giving, at least for some semi-plausible assumptions about the relationship between effort and income?

At the moment, I don't know. I have a page full of scribbled attempts to derive something of the kind, but they didn't work out. And of course there might be some better way to get proportional giving out of plausible ethical principles. Anyone want to do better?

A few remarks about mass-downvoting

17 gjm 13 February 2014 05:06PM

To whoever has for the last several days been downvoting ~10 of my old comments per day:

It is possible that your intention is to discourage me from commenting on Less Wrong.

The actual effect is the reverse. My comments still end up positive on average, and I am therefore motivated to post more of them in order to compensate for the steady karma drain you are causing.

If you are mass-downvoting other people, the effect on some of them is probably the same.

To the LW admins, if any are reading:

Look, can we really not do anything about this behaviour? It's childish and stupid, and it makes the karma system less useful (e.g., for comment-sorting), and it gives bad actors a disproportionate influence on Less Wrong. It seems like there are lots of obvious things that would go some way towards helping, many of which have been discussed in past threads about this.

Failing that, can we at least agree that it's bad behaviour and that it would be good in principle to stop it or make it more visible and/or inconvenient?

Failing that, can we at least have an official statement from an LW administrator that mass-downvoting is not considered an undesirable behaviour here? I really hope this isn't the opinion of the LW admins, but as the topic has been discussed from time to time with never any admin response I've been thinking it increasingly likely that it is. If so, let's at least be honest about it.

To anyone else reading this:

If you should happen to notice that a sizeable fraction of my comments are at -1, this is probably why. (Though of course I may just have posted a bunch of silly things. I expect it happens from time to time.)

My apologies for cluttering up Discussion with this. (But not very many apologies; this sort of mass-downvoting seems to me to be one of the more toxic phenomena on Less Wrong, and I retain some small hope that eventually something may be done about it.)

[Link] False memories of fabricated political events

17 gjm 10 February 2013 10:25PM

Another one for the memory-is-really-unreliable file. Some researchers at UC Irvine (one of them is Elizabeth Loftus, whose name I've seen attached to other fake-memory studies) asked about 5000 subjects about their recollection of four political events. One of the political events never actually happened. About half the subjects said they remembered the fake event. Subjects were more likely to pseudo-remember events congruent with their political preferences (e.g., Bush or Obama doing something embarrassing).

Link to papers.ssrn.com (paper is freely downloadable).

The subjects were recruited from the readership of Slate, which unsurprisingly means they aren't a very representative sample of the US population (never mind the rest of the world). In particular, about 5% identified as conservative and about 60% as progressive.

Each real event was remembered by 90-98% of subjects. Self-identified conservatives remembered the real events a little less well. Self-identified progressives were much more likely to "remember" a fake event in which G W Bush took a vacation in Texas while Hurricane Katrina was devastating New Orleans. Self-identified conservatives were somewhat more likely to "remember" a fake event in which Barack Obama shook the hand of Mahmoud Ahmedinejad.

About half of the subjects who "remembered" fake events were unable to identify the fake event correctly when they were told that one of the events in the study was fake.

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