Monday, December 19, 2011

The Experience Bank

Everything either brings net positive emotions (happy) or negative emotions (sad). They also bring varying amounts of happiness or sadness. For example, the night I got engaged was one of the happiest days of my life. Let's just label that 100 (happiness) points. My recent move on the other hand, has been fairly difficult. Let's label that -25 (sadness) points. Positive experiences add a finite amount to our life satisfaction and negative ones subtract a finite amount from it. The balance of those events are the measure of how we feel about our lives.

Although this seems obvious there are some interesting implications when you start to consider that experiences, like money, can be borrowed. Upcoming events, both and good and bad, have expectations. Those feelings are you taking some of those points out before they are earned. Here are three scenarios:

Neutral: Imagine you have a holiday coming up. The entire week before you imagine all the great experiences you are going to have. When the day arrives, it goes exactly how you thought it would. But when things go exactly like we think, even when they are great, we aren't ecstatic. It's because we consumed a lot of the positive happiness points before the event even happened. We borrowed from future happiness. This Louis C.K. bit describes it perfectly.

Deficit: But like real debt, sometimes we can predict our future earnings incorrectly. Imagine that same holiday is coming up and we have the same expectations. But nothing happens. No one shows up to your get together. No one calls. Nothing. Then you are sad. You're not sad because nothing special happened. Nothing special happens all the time. You're sad because all week you borrowed from the experience bank and your Christmas bonus didn't come.

Surplus: Now imagine a third scenario. The holidays are coming up, but you have no expectations of fun. All week you dread the day because you just know it is going to be miserable. Then suddenly all your friends and family arrive for some amazing holiday fun. You explode with joy. You hadn't consumed any of the experience value until that very moment and now you get to gorge.

So which situation is best?Neutral account? Deficit account? Surplus account? Well clearly the deficit is worst. No one likes to be let down. Except I see a lot of people who live their life like this. They have unrealistic expectations for the future. They live rich in the present, but will suffer in the future. A surplus account also has it's problems. Sure you get the explosion of joy when things turn out great, but in the meantime you are miserable.

That why I personally prefer a neutral account. You get to spread out the joy (or pain) of events over a long period of time. It's not about being optimistic or pessimistic. It's about being right. It's giving the gift people want for Christmas is best, even if you were able to accurately guess what they wanted. And why having a loved one die suddenly is worse than having them die slowly (unless they die too slowly which creates a whole different experience). This is what happened with my recent life transition. The experience itself wasn't that terrible. I had just not expected my life to ever get worse. I had been borrowing from my "imaginary eternal spiral upward, into a bigger and better future".

But here's the kicker. I started this post assuming my preference was the right answer. But I broke one of my own presuppositions that people have wildly different preferences. It turns out some people do like to play the lottery. Conversely, other people fear change so much they would rather be a little more sad in the present than ever be really sad in the future. I expect that there are different discount rates for happiness like there are for money. Perhaps being experientially patient results in more wealth just like being economically patient results in more real wealth. I know I often tend towards preferring the present too much. So feel free to get your hopes up or down, just know there is no so such thing as a free hope.


  1. A friend of mine once told me to only expect and hope for things that God has promised. This takes optimism and pessimism out of the equation, and also trains us to have appropriate expectations. This may help us pop the bubble of our individual happiness market.

  2. Good point Brad. And a happiness market "bubble". I like that idea.


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