Theories in behavioral economics and psychology have identified a number of biases with respect to our memory of experiences, our prediction of experiences, as well as the change of actual subjective experience over time. For example, when we try to predict how we will feel in the future, we may overestimate the intensity of our emotions. The level of happiness that I expect to feel during my next vacation may be higher than how I will rate it during the actual experience. There are different explanations for this error, including how we remember past events. My memory of a past vacation is likely to be non-representative of the vacation overall, and I may evaluate it based on the most pleasurable points and its end, for example, rather than the average of every moment of the experience (the peak-end-rule). In addition, as my vacation days go by, I will simply get used to it and my happiness will level out. According to the concept of hedonic adaptation, changes in experiences tend only to induce happiness temporarily as we get used to new circumstances.
Hedonic adaptation, also known as the "hedonic treadmill," refers to the simple fact that people get used to change. Physical adaptation has allowed humanity to survive on a species level. Psychological adaptation allows us to cope and survive on an individual level. Just as the happiness that comes with the pleasures of a beach vacation may wane over time, even the subjective effect of major negative life events, such as bereavement or disability, tends to level off to some extent.
The power of hedonic adaptation can be illustrated by the effects of an experience that is disrupted. A study by Nelson and Meyvis (2008) shows that interrupting a consumption experience can make an unpleasant experience more irritating and a pleasant experience more enjoyable. The following graph, for example, depicts how a looped song becomes more enjoyable when it is interrupted by guitar feedback:
Hedonic adaptation has both positive and negative implications – it’s “adapt or perish” in some contexts, “adapt or cherish” in others.
The brand new Behavioral Economics Guide 2014, which I published this week as a free online resource, features an exclusive foreword (in the form of an email exchange) by George Loewenstein, a founding father of behavioral economics, and the ad man and behavioral economics advocate Rory Sutherland. According to Professor Loewenstein, adaptation is a good example of a factor that drives a wedge between the objective and the subjective: "To the extent that we experience, but fail to predict, adaptation in ourselves and others, all sorts of ... bad consequences arise—interpersonal misunderstandings and bad decisions," such as our inability to predict future feelings and preferences. He further writes:
Adaptation is almost certainly, in the net, a good thing. Pain, hunger, sexual deprivation, and other forms of misery are signals that evolved to motivate behaviors that promote survival and reproduction. If the signal, such as hunger, has been in force for an extended period, but we have failed to take actions to eliminate it, it almost surely indicates that we are unable to do so or have consciously decided that it’s not worth it. In that case the signal serves no further function, and nature has mercifully evolved a mechanism—hedonic adaptation—to eliminate it. An organism that doesn’t adapt hedonically will not survive for long; yet, adaptation has diverse downsides.
The most obvious ‘cost’ of hedonic adaptation is that it occurs for goods as well as bads, creating the ‘hedonic treadmill’ that prevents us from enjoying whatever successes we may achieve in life. Adaptation to pleasurable experiences may also be responsible for destructive addictions, which are due in part to the decreasing pleasure taken from a given level of a good or activity and in part to the displeasure (craving)—which increases in intensity the longer and more we have been indulging—experienced when consumption of the good or activity ceases.
Also, as a result of adaptation, we can become inured to, and complacent in accepting, circumstances that in the long run are not good for us. Well before we became collectively aware of the horrendous threat of climate change, Dubos (1965:278-279) wrote prophetically that “this very adaptability enables [us] to become adjusted to conditions and habits which will eventually destroy the values most characteristic of human life.”
Adaptation may work against moral values as well. In his book Nazi Doctors, R.J. Lifton (1990) describes a process whereby German doctors (who had taken the Hippocratic Oath to do no harm) were gradually transformed into active killers, and Christopher Browning documented, in his book Ordinary Men, a similar process among German ‘Police Orders’ in Poland. In the famous Milgram experiment, subjects were not asked to instantly administer a potentially lethal shock but were given a series of requests to increase the voltage slightly. Having just administered a 100-volt shock to someone, administering a shock of 105 volts doesn’t seem all that much worse.
Adaptation provides a fascinating perspective on how our subjective experience may change over time and what this – good or bad -- means for individuals and society. What’s Rory Sutherland’s response to George Loewenstein, and how does his view of marketing address subjective experience? Read more in the Behavioral Economics Guide 2014.