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Faculty Insights: Prof. Steyrer | The winner takes it all?

January 28, 2016

Our study sets out to examine how the earnings of people, their leadership responsibilities, the subjective levels of success and their career satisfaction interrelate.

By Prof. Johannes Steyrer​

Which of the following options would you choose? a) You earn EUR 50,000 annually and your most important reference persons EUR 40,000. b) You earn EUR 60,000 and your most important reference persons EUR 70,000.

Against all economic reason, people tend to prefer option A. Why is that?

Our study set out to examine how the earnings of people, their leadership responsibilities, the levels of success that the other individuals in their professional environments subjectively perceive them to have and their career satisfaction interrelate. Neither people's earnings nor their leadership responsibilities have a direct impact on how satisfied they are. However, there is a positive correlation between their leadership responsibilities and their earnings, which is hardly surprising, considering that how much people earn plays a crucial role in terms of the levels of success that the other individuals in their professional environments perceive them to have.

What is really exciting is that only the level of perceived success has a strong influence on satisfaction. It all boils down to this: power and money are no direct sources of happiness. The more power people have, the more money they make; the more money they make, the greater their perceived success, and the greater their perceived success, the happier they are.


According to what is known as "aspiration theory", this has to do with the fact that satisfaction is less the result of people's levels of objective well-being or success than it is a function of the discrepancies between their expectations and reality. The expectations of individuals are determined by the reference groups that are significant to them. Therefore, individual happiness is based primarily on the perception that others are doing less well. Economists say it has "negative externalities". Ultimately, it is other people’s projected envy that makes all the difference. Alas, expectations and the perceived discrepancies resulting from them never stay the same. On the contrary, they are permanently increasing: in exchange for a little bit of happiness, we are trapped for life on the hedonic treadmill, expecting and desiring more and more all the time. If I think my friends are jealous, this makes me happier. Alas, one's expectations and the resulting, perceived discrepancies never stay consistent; on the contrary, they are always increasing: in exchange for a little bit of happiness, we are trapped for life on the hedonic treadmill, expecting and desiring more and more all the time. 

The alternative to this: a good conversation will always be a good conversation, but a good car will not always be a good car.  

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