The Price of Happiness: Behavioral Economics and Willingness to Pay

People often 'miswant.' They buy goods that do not make them happy and refuse to buy goods that would make their lives better.In The Price of Happiness, Cass R. Sunstein focuses on people's 'willingness to pay,' which is the foundation for free markets.He argues that willingness to pay deserves respect, and high honors in the annals of history, when buyers know what they are getting.It's when buyers lack information, or suffer from behavioral biases, that they might miswant.Special conundrums also arise when we try to monetize goods we don't normally consider in monetary terms, like pristine areas, human dignity, and social media.Exploring behavioral biases and their effect on human welfare, Sunstein shows how behavioral economics can be used to increase human happiness.