Why Earning More Leads To Lesser Satisfaction

Have you ever noticed how earning more leads to lesser satisfaction? By ‘earning’, I don’t mean just money. This notion can be applied to social media likes/shares, sports victories, tasty food, etc. Talk about a profound realization! Just what exactly is going on here?

It turns out that science has answers to this question. As with any area of science, we have to start from the fundamentals. The term ‘earning’ is what I would define as a higher-order phenomenon. This is a fancy way of saying that it is a phenomenon composed of other basic phenomena. So, we need to understand these basic phenomena first before we jump to ‘earning’.

In this article, I will first take you through a brief history of the key people who sought answers to such questions. Then, I will cover the fundamental phenomena associated with our main question. Finally, I will try to derive a sufficient answer to our main question.

Once you understand the mechanics in play here, you are more likely to make life-fulfilling decisions. This was certainly the case with me. Right, let’s get started.

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The Just-Noticeable Difference

Ernst Weber was born in Germany (Saxony) in 1795. His father was a professor of theology at the University of Wittenberg. He was heavily influenced by the famous physicist, Ernst Chladni, and consequently developed an interest in physics and the sciences. He later went on to become a physician who specialized in anatomy and physiology.

Weber observed that human beings often tended to perceive certain changes in physical phenomena, whereas other times, they failed to notice changes. Being a scientific person, he designed precise experiments aimed at understanding when people noticed changes in physical phenomena.

As a result of his experimentation, he came up with the concept of ‘Just-Noticeable Difference (JND)’. He defined it as follows:

“..in observing the disparity between things that are compared, we perceive not the difference between the things, but the ratio of this difference to the magnitude of things compared.”

– Ernst Weber

Imagine that you are holding a weight in each of your hands. Weber’s experimentation showed that you would be able to tell that one of the weights was heavier or lighter only if it varied by 8–10% from the other one. If the variation was lesser than this range, people usually did not notice the difference. This percentage threshold essentially captures the JND.

Assume that you are holding a weight of 100 grams on one hand and 120 grams on the other. You are likely to notice which weight is heavier. Imagine now that you are holding 900 grams on one hand and 920 grams on the other. Even though the difference in weights is the same as before, you are unlikely to notice the difference this time around.

Weber went on to establish that the JND was not a fixed percentage/ratio and that it varied for different human senses.

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The Logarithmic Relationship

Gustav Fechner was born in Germany in 1801. He studied medicine and was active in the fields of physics, philosophy, and psychology (among others). He eventually became a professor of physics at the University of Leipzig.

Fechner was a student of Weber and continued his legacy. He formulated Weber’s findings as a mathematical relation, and named it “Weber’s Law” in his honour:

ΔR/R = k

Where ΔR is the amount of stimulation that needs to be added to produce a JND,

R is the amount of existing stimulation, and

K is a constant (different for each sense).

On further experimentation, Fechner found out that Weber’s law did not hold for the lower or upper limits of sensory modality. He continued experimenting and researching and eventually came up with the Fechner law. It has the following mathematical formulation:

P = K*ln(S/S0)

Where P is quantified human perception,

S is the stimulus being experienced,

S0 is the stimulus that is used as the benchmark comparison,

K is an empirical constant that has to be experimentally determined for each phenomenon, and

ln is the natural logarithm with base e.

In short, Fechner’s findings suggested a logarithmic relationship between stimulus and perception (I’ve covered the history and relevance of logarithms in this article). He eventually led the way to the establishment of a new field called Psychophysics that studies such sensory phenomena. The efforts from Weber and Fechner also paved way for psychology to develop as a quantitative science.

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The Five senses

Imagine that you are in a dimly lit hall. All of a sudden, someone lights up a candle. The candle’s flame is not the brightest source of light, but you would certainly feel its illumination. Now, imagine that you are in a brightly lit hall, and someone lights up the same candle. Even though the candle’s light intensity remains the same, you would feel less illumination from it.

Similar phenomena occur when you experience a mild sound in a silent hall compared to a loud hall. If you can relate to your own real-life experiences, you will quickly realise that this phenomenon applies to your other senses of touch, smell, and taste as well.

The Validity of the Weber-Fechner Laws

While both Weber and Fechner aimed to quantify these sensory phenomena, their work has gone through scrutiny over time. There have been scientific efforts to test, verify, and disprove the application of these laws. I’ll link some of these works in the references section at the end of this article.

The problem of quantification is so challenging that there exist doubts about these mathematical relations being laws in the first place. What is irrefutable, however, is the approach that Weber and Fechner took to study these phenomena. Their approach, at the very least, showed that non-linearity exists in human perception.

This insight alone is sufficient for us to try to derive an answer for our main question.

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Why Earning More Leads to Lesser Satisfaction

The first point we have to take into consideration is that the act of ‘earning’ is experienced as a combination of the five fundamental human senses of sight, hearing, taste, touch, and smell. It is difficult to quantify the exact ratio of these human senses that go into the experience of ‘earning’ because of the following 2 reasons:

1. Human subjectivity: each person has a unique experience of ‘earning’, and thereby a unique ratio of senses associated with it.

2. Contextual subjectivity: Each unique situation poses a unique understanding of ‘earning’, which again leads to a further level of human subjectivity.

This is what I meant when I said that ‘earning’ is a higher-order phenomenon at the beginning of the article.

What we have established so far is that quantifying a ratio between satisfaction and earning is very difficult (it might even be impossible). However, there exists a qualitative answer to our question from our findings so far.

Human beings tend to think linearly and experience reality non-linearly. When we experience something good, we think that more of the same will lead to proportionately more of the same good feeling in the future (arguably leading to satisfaction). However, when we actually experience more of the same good thing, we don’t feel as good as we thought we ought to feel.

My understanding is that this disparity between our linear extrapolation of present experience in thought versus our non-linear reaction to experience in the future is the reason why earning more leads to lesser satisfaction.

How Does this Affect Our Decisions?

Knowing that our experience is going to be non-linear in the future changes our present behaviour. People who tend to take non-linearity into consideration tend to do this at the cost of quick decision making. In other words, these people tend to take longer to do the mundane things in day-to-day life.

So, if linear thinking gives us speed and non-linear thinking gives us better insights into the future, does there exist a middle ground?

I’m glad to say that there does exist a solution: Heuristics. A heuristic is a practical rule-based execution method that is not meant to be perfectly optimal, but good enough to ensure sufficient outcomes considering the rule framework. In other words, we could design heuristics that consider the non-linearity of our future experience, and yet, do not cost us a lot of brainpower.

Heuristics are nothing new to human beings. You and I use them all the time without realizing it.

However, from my experience, when I started actively designing heuristics based on the knowledge that I learnt through trial and error, interestingly positive results started to occur. My decisions were more geared towards a fulfilling life. Your mileage may vary. But hey, it might be worth a shot!

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References: Ditz and Nieder (research paper), Algom (research paper), Nutter Jr. and Esker (research paper), and Hecht (research paper).

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Further reading that might interest you:  Logarithms: The Long Forgotten Story of Scientific Progress, What Really Happens When You Measure A Coastline? and Why Do You See Mirrors Flipping Words?