Expanded Summary

This paper is part of a broader research effort aimed at challenging one of the central assumptions in classical economic theory—namely, that individuals are rational decision-makers who act consistently to maximize their utility. Unlike traditional models, such as utility theory, which treat individuals as fully rational agents capable of evaluating all options and making optimal choices, this study advances the hypothesis that human behavior frequently deviates from rationality. Specifically, it investigates how emotional well-being and satisfaction are shaped not solely by what individuals possess, but by how they perceive their own outcomes relative to those of others.

To test this hypothesis, the paper presents findings from two original experiments that utilize primary data collected through an experimental methodology. The overarching aim of these experiments is to explore how individuals\' emotional well-being is influenced by comparative evaluation rather than absolute outcomes. In other words, we suggest that individuals may not always know what they want in absolute terms, but they do know how to compare—often benchmarking their satisfaction against what others receive. This comparative mechanism serves as a key driver of emotional reactions such as happiness, disappointment, or resentment.

The first experiment was conducted among students from two different universities. A total of 138 participants took part in the experiment, which was organized into three distinct groups. In the context of an academic task, bonus scores were distributed among students. One group received a modest bonus, while another received a significantly larger bonus. The primary group was then informed that their peers in the other group had received more. The findings revealed a sharp decline in the reported emotional well-being of the students who learned that others had received greater bonuses—even though their own rewards remained unchanged. This suggests a strong comparative effect: the mere knowledge of being disadvantaged relative to others had a measurable negative impact on emotional satisfaction.

The second experiment was conducted on a broader scale within the city of Tbilisi. Unlike the student-based sample of the first experiment, this study relied on random sampling across various locations and demographic groups. The goal was twofold: first, to replicate the results of the initial experiment in a more diverse population; and second, to distinguish between the emotional satisfaction derived from the possession of basic, essential resources and the satisfaction that stems from luxury or surplus items. In this case, rather than bonus scores, participants were given tangible rewards in the form of candies. One group received a small quantity (e.g., a single candy), while another group received a much larger amount. The emotional responses of the first group were then measured after they became aware of the disproportionate distribution. Once again, the results confirmed a marked decline in emotional well-being due to relative disadvantage, reinforcing the idea that individuals derive happiness not only from what they have, but from what others around them possess.

The paper contributes to the growing body of behavioral economics research that seeks to uncover patterns of irrational behavior and challenge the predictive validity of classical economic assumptions. The two experiments demonstrate that comparative thinking plays a critical role in shaping emotional reactions, even when the material or monetary stakes are low. This irrationality appears to follow a consistent pattern, which the paper attempts to model algorithmically. Furthermore, the study offers practical implications and recommendations for economic and business decision-making. For instance, marketing strategies, employee reward systems, and public policy design may benefit from recognizing the psychological weight of comparative satisfaction.

The findings suggest that simply increasing the absolute value of a reward or benefit is not always sufficient to produce positive emotional outcomes; it must also be perceived as fair or superior in comparison to others’ outcomes. In environments where people are constantly aware of how they fare relative to others—such as workplaces, classrooms, or consumer markets—emotional well-being may become more sensitive to perceived inequality than to absolute gain.

In conclusion, this paper supports the idea that people are not purely rational agents. Instead, they are influenced by context, comparison, and emotional heuristics that guide their evaluations. By experimentally identifying and quantifying this irrational behavior, the study contributes both theoretical insights and practical tools for understanding human behavior in economic and social contexts.