How can it need not be satisfying to have one’s preferences fulfilled? Isn’t that the definition of a preference? There is the possibility that you thought you preferred something but find out that you don’t, but I don’t think that’s what you mean.

I elaborate on the ambiguity of “satisfaction” in the update at the end of the post.

Ignorance may truly be bliss.

A lot of the problem in understanding happiness and satisfaction evolves from simplifications necessary for the two-good tradeoff models we economists use for utility theory. We can only reach a certain level of satisfaction at a given level of resources for any two goods. We could satisfy any number of two-good tradeoffs and still not be happy.

This is precisely why money can’t buy happiness.

However, if the city-dweller has many things to want and the farmer few, it is easy to understand why so many psychiatrists exist to serve the over-achievers. They can’t get no satisfaction (happiness, really) because they want and expect so much. They get quite a bit of total utility, but it is small in relationship to their wants. The farmer, on the other hand, may get less utility measured against the same yardstick, but be far happier because his proportion of total wants has been satisfied.

Thus… advertising. It makes us want more things. Our total utility may be quite high, but it is less than it could be if we just had that one more thing.

Which brings up the problem of preferences being rational.

Let’s say you’re terribly depressed, and you prefer to stay in bed versus a walk in the sunshine (which in a rational state you know would be far better in alleviating your current state). You stay in bed because of the irrational assumed utility you have from the bed.

Whether we’ve optimized utility can only be measured in hindsight, then, unless we are totally ex ante rational… which I safely assume we are not. This breaks down the whole construct of ex-ante rationalism required for “economic man.” We are left with a hodge-podge of irrational utility-seekers, the choices of which can only be measured statistically rather than exactly.

I do sort of think desire satisfaction theories of well-being are crazy. Counterfactual or full-information desire satisfaction theories aren’t crazy, but then they’re really not desire satisfaction theories at all, especially if what it turns out that a rational person ought to desire is the good. Tyler Cowen has pointed out a number of difficulties here in his excellent preference sovereignty paper… um… here:

http://www.gmu.edu/jbc/Tyler/preferencesovereignty.PDF

Obviously, economics isn’t predictive unless one posits some regularities in preference orderings. The trouble is, economists would like two incompatible things: (1) for economics to be a priori and (2) for economics to be predictive. But you can have one or the other. Yet economists try to split the difference by substituting their folk psychological theory for a proper psychological theory, and just hope no one calls bullshit, so they don’t have to leave the armchair.

Also, I didn’t say preference wasn’t in some sense a psychological notion. Preferences, like beliefs, are mental states. What I said was that preference satisfaction wasn’t a psychological state. If a mouse walks into Krugman’s kitchen and thereby fufills the satisfaction conditions of my preference for a mouse there, my global mental state won’t have changed a bit. If utility is what you get when the world matches a preferences, then the utility I get from Krugman’s mouse also fails to alter my overall mental state.