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The Secret to Happiness: Where Buddhism and Behavioral Economics Meet

Lower Expectations, Higher Happiness

Photo by Kamesh S S on Unsplash

Humans often disagree on most things in life: from arguing over the best restaurant in town to the greatest footballer of all time. However, most humans — ancient or modern; from the east or the west; living in mountains or in deserts — would agree that the ultimate purpose of any human endeavor is to find “happiness”.

And sometimes, we do find happiness from both individual and collective successes. But, the fundamental predicament of life — as Buddha suggests — is that happiness derived from earthly successes does not last forever. In fact, contrary to our expectations, suffering — the exact opposite to happiness — often pervades our lives. Once back in college, one of my friends, while referring to the sine wave on an oscilloscope, said “if we could plot happiness over time like the voltage, it would follow a similar pattern!” Regardless of the true shape of happiness over time, my friend, at least in philosophy, was not wrong after all! None of us knew about Daoism back then but he was on the right track: happiness and sadness often come in phases.

This is what my friend was referring to (but I have no idea how happiness evolves over time!)

Buddha apparently found a solution by identifying the cause of suffering and proposing an intervention. According to Buddhist philosophy, . Given the causal assumption is correct, logically, .

Buddhist suggestion is quite simple: . would lead to, which, in turn, would lead to

The above pathway may seem rather radical and extreme — perhaps it makes sense only for monks and nuns. How about us ordinary humans: the ones not necessarily “aspiring” for nirvana? Can we do something to maximize our happiness?

Last semester, as part of one of the courses I was taking, I found this amazing paper by Medvec, Madey, and Gilovich (1995). The authors investigate . According to their findings,

But how is that possible? The authors argue: the level of expectation makes the difference — silver medalists are more likely to have the expectation of winning the gold, whereas bronze medalists are more likely to consider the possibility of finishing fourth and winning nothing.

Long story short: If we achieve more than we expected, we find happiness; if we achieve less than our initial expectation, we become sad.

Working with a simple equation illustrates the point:

Let’s assume, someone's happiness can be described using the following expression:

If Actual Outcome ≥ Expected Outcome,

Happiness = Actual Outcome - Expected Outcome

And, if Actual Outcome < Expected Outcome,

Happiness = -2 * (Expected Outcome - Actual Outcome)

You may have noticed, for the second condition, I am multiplying the difference by -2. This is to account for, which purports that

Let’s think about some real-world scenarios to explore the implications of the equation!

Let’s say, I get a 90 in an exam. I expected to get a 93. Then, my happiness = -2 (93-90) = -2*3 = -6

In case I had a lower expectation, for example, an 85, with the same actual score of 90, my happiness would have been = 90–85 = +5

What this simple example implies is: the lower someone’s expectation is — regardless of the actual outcome of an event — the greater will be her happiness!

Presumably, Buddha is right. Happiness, then, is not necessarily about conquering the world, rather about training ourselves to avoid expectations or, at least, to keep them low. A relevant practical question is: how far down can we put our expectations without puncturing our motivations? Ultimately, as Daoists may argue, the solution is all about finding the right balance between expectations and no expectations to make us “sufficiently” happy.


Medvec, V. H., Madey, S. F., & Gilovich, T. (1995). When less is more: counterfactual thinking and satisfaction among Olympic medalists. , (4), 603.

Merkle, C. (2020). Financial loss aversion illusion. , (2), 381–413.

Tversky, A., & Kahneman, D. (1991). Loss aversion in riskless choice: A reference-dependent model. , (4), 1039–1061.