A cognitive model of individual well-being

This paper offers a model of individual well-being that takes into account cognitive factors. It postulates that individuals compare payoffs to aspira tion levels. The latter are determined by past experiences (adaptation), by other people's performance (interpersonal comparison), as well as by reaso ning (justifications and excuses). We axiomatize a measure of well-being de fined on real-valued vectors of various lengths. It is a linear combination of differences between payoffs and aspiration levels. where the aspiration level at each instance is a linear function of past payoffs.