Escher and Redemption: Using Cyclical Preferences to Overcome Hedonic Treadmills

This morning I started thinking about using violations of classical economic theory to increase well-being. The main idea is probably obvious to anyone familiar with the relevant literature on cyclical preferences and the hedonic treadmill, but I think it’s still worth articulating cleanly. Please let me know if you have a reference to existing literature on this approach.

First, let’s assume the following things about our idealized human being:

  1. They possess cyclical preferences where A > B, B > C and C > A.
  2. Their derived pleasure from experiencing A, B or C is based on an adaptive scale, i.e. they derive pleasure from having something better than their local average consumption.

Under these assumptions, the best possible consumption stream is an ordered walk through the cycle of their preferences, such as (A, B, C, A, B, C, …). Assuming that their adaption is sufficiently local, they will able to continually derive pleasure from moving along the preference chain, despite the hedonic treadmill slowly eroding the gains made from any single movement along the preference graph.

The big idea here is that cyclical preferences, which are generally assumed to lower welfare, can be exploited to increase welfare for agents that suffer from a hedonic treadmill. Since there is some reason to believe in both violations of classical theory, this is potentially one trick for improving one’s own well-being.