“[Bernoulli] suggested that the wisdom of any decision could be calculated by multiplying the probability that the decision will give us what we want by the utility of getting what we want. By utility, Bernoulli meant something like goodness or pleasure.’ The first part of Bernoulli’s prescription is fairly easy to follow because in most circumstances we can roughly estimate the odds that our choices will get us where we want to be. How likely is it that you’ll be promoted to general manager if you take the job at IBM? How likely is it that you’ll spend your weekends at the beach if you move to St. Petersburg? How likely is it that you’ll have to sell your motorcycle if you marry Eloise? Calculating such odds is relatively straightforward stuff, which is why insurance companies get rich by doing little more than estimating the likelihood that your house will burn down, your car will be stolen, and your life will end early. With a little detective work, a pencil, and a good eraser, we can usually estimate—at least roughly—the probability that a choice will give us what we desire.”
At this point, Gilbert (Gilbert, 2006, p. 260) turns specifically to the relationship between utility and wealth:
“The problem is that we cannot easily estimate how we’ll feel when we get it. Bernoulli’s brilliance lay not in his mathematics but in his psychology—in his realization that what we objectively get (wealth) is not the same as what we subjectively experience when we get it (utility). Wealth may be measured by counting dollars, but utility must be measured by counting how much goodness those dollars buy. Wealth doesn’t matter; utility does.”
Gilbert (Gilbert, 2006, p. 260) now focuses specifically on the relationship between money (wealth) and happiness:
“We don’t care about money or promotions or beach vacations per se; we care about the goodness or pleasure that these forms of wealth may (or may not) induce. Wise choices are those that maximize our pleasure, not our dollars, and if we are to have any hope of choosing wisely, then we must correctly anticipate how much pleasure those dollars will buy us.”
So, it is a matter of choosing wisely in our use of the money we have acquired. Happiness comes not from the money, but from the way this money is used.
Finding Happiness: Possessions and Experience
Behavioral economists such as Daniel Kahneman (2013) and Scott Huettel (Huettel, 2013) have cautioned us about the ineffective expenditure of money to achieve happiness. They specifically have challenged us to consider the impact of new possessions on states of happiness, as opposed to the impact of special experiences. While a new watch—or new car—may bring us a few moments (or even days) of joy, we soon become accustomed to the new watch or car. They no longer produce a “high” for us. We must find some new possession to provide this “high” – and, as a result, we become addicted to consumption.
On the other hand, we can take a trip to our local national park (instead of buying the watch) or embark on a month-long trip to the wineries of France and the Alps of Switzerland and Italy (instead of buying the car). We bring along our camera and someone dear to us in our life. Behavioral economists predict that we will not only get a “high” from our tour of the wineries and our journey through the alpine meadows of Switzerland, but also from our recounting of this trip with our companion and back home with our family and friends (via the phonographs). Put simply, we are likely to find more happiness in new experiences than in new possessions. Yes, we might become addicted to new experiences (becoming a world traveler), but this form of addiction leads to easier and more frequent “highest” and less of a need to always be in an experiencing state.
