Abstract
Recent developments in identifying economic and social phenomena within the theory and laws of physics do not provide a sufficient basis of information for economists. In this article, an interdisciplinary analysis in microeconomics, is proposed to overcome this limit by establishing a new economic theory in the way of better analyzing economic problems from the methodological perspectives of physics. This new theoretical approach is tested on a model using individual time use values that identifies how life satisfaction may be defined through economic utility so as to better investigate the income-happiness paradox as pointed out by Easterlin. The theoretical analysis point out that an increase in happiness would depend on the ability to replace subsidiaries with conspicuous consumption so long as they have common characteristics that satisfy the same needs. This consumption pattern implies that consumers would draw more satisfaction from less usage of conspicuous goods than from higher usage of subsidiaries, under given budget and time constraints.
Highlights
Econophysics is a field of research that aims to empirically discover and interpret in terms of models regularities, through physics formulas, in the temporal, spatial and social settings of economic and social phenomena
The aim of this study is to develop a new micro theory to better analyze the nature of the relationship between life satisfaction and utility through the methodology proposed by physics in order to answer such questions as: 1) How should the relationship between life satisfaction and utility based on individual time use and consumption values be defined?
This equation reveals that for an identical state of satisfaction, the higher the speed of satisfaction becomes, the less consumption goods are required and vice versa. Such a consumption pattern implies that consumers would prefer to satisfy their needs via conspicuous goods rather than via subsidiaries
Summary
Econophysics is a field of research that aims to empirically discover and interpret in terms of models regularities, through physics formulas, in the temporal, spatial and social settings of economic and social phenomena. This approach mainly focuses on the observation of real systems in model-building and development without emphasizing or explaining the socio-economic theoretical background of a system. These attempts are generally designed to evaluate specific research questions regarding finance or certain economic structures through comparisons between physics and economics. The flood of data that results from the extraordinary and growing speed and ubiquity of computers provides attractive, spectacular results with new job opportunities for physicists
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