Dr. Wallace's Favorite Mental Models

The Hedonic Treadmill

Why the raise, the promotion, or the new house feels incredible for a few weeks and then quietly becomes "just my life" — and why chasing the next version of the same win rarely gets you off the treadmill.

Well-being & motivation Compensation & rewards Personal finance ~9 min read

1Fast Overview

The idea in one line
You don't settle at a fixed happiness level after a gain or a loss — you adapt toward it, so your sense of "normal" quietly rises or falls to meet whatever just happened, which is why almost any single win fades faster than you expect.
Where it comes from
Named "hedonic relativism" by psychologists Philip Brickman and Donald Campbell in a 1971 paper, then tested directly in a landmark 1978 study (Brickman, Coates, and Janoff-Bulman) comparing lottery winners, a control group, and people who had become paraplegic or quadriplegic in accidents.
The twist most people miss
It isn't that the good thing stops being good. It's that the good thing becomes the new thing you measure everything else against — so the bar for feeling the same lift again keeps moving up, not staying where it was when the win first happened.
Why it matters at work
Compensation and total-rewards design, product and habit design (why apps keep escalating their rewards), managing post-promotion disengagement, personal financial planning and lifestyle inflation, and judging an AI tool only against the "new normal" baseline it already reset for you.

2Mental Model Compass

Field of originPositive psychology & well-being economics
Core mechanismWell-being is judged against a personal baseline that itself recalibrates after a change, not against a fixed, lifelong scale
Best used forCompensation and rewards design, personal financial planning, product and habit design, managing your own expectations after a win or a setback
Watch out forUsing it as an excuse for giving up on improving things — adaptation is real but partial and uneven, not proof that effort is pointless

3Learn It: Step by Step

Step 1 — Happiness has a floating baseline, not a fixed one+
Most people picture happiness like a thermostat with a permanent setting: good things push it up, bad things push it down, and it stays there. The hedonic treadmill says the setting itself moves. After living with a raise, a new relationship, or a disability for a while, that condition becomes the backdrop everything else gets judged against — so the feeling of "better than before" naturally fades even though the actual circumstance hasn't changed at all.
Step 2 — The study that made this concrete: lottery winners and accident victims+
In 1978, Philip Brickman, Dan Coates, and Ronnie Janoff-Bulman published "Lottery Winners and Accident Victims: Is Happiness Relative?" They compared people who had won major lotteries, a matched control group, and people who had become paraplegic or quadriplegic in accidents. Past winners rated their general happiness only modestly above the control group — and rated small, everyday pleasures (a compliment, a joke, a good meal) as less enjoyable than the controls did, consistent with their baseline for "a good moment" having shifted upward. Accident victims rated their past, pre-accident life as happier than their present one, yet still rated their present-day happiness clearly above the neutral midpoint of the scale, and expected to feel happy again soon — evidence that adaptation was pulling their baseline back up, not just down.
Step 3 — This is a different mechanism than Loss Aversion or Prospect Theory+
Prospect theory describes how a gain or a loss is weighed against your reference point right now, at the moment of a decision — losses hurting roughly twice as much as equivalent gains feel good. The hedonic treadmill describes something that happens afterward: that reference point itself drifts to absorb the gain or loss over the following weeks and months. One is about the shape of value in a single moment; the other is about the ground shifting under that moment once you've lived with it a while.
Step 4 — Adaptation isn't equal for every kind of change+
Researchers who revisited Brickman and Campbell's original model proposed that people have individual happiness "set points" that can still shift over time rather than being perfectly fixed, and that adaptation appears to move faster and more completely for some domains — like a pay raise or a new possession — than for others, where some studies on well-being suggest adaptation is slower or less complete. The honest version of this model isn't "you'll get used to literally anything equally fast." It's "your baseline moves, but not at the same speed or to the same degree for every kind of gain or loss."
Step 5 — The practical test+
The useful question isn't "did this make me happier?" It's "am I judging my current happiness against my life before this gain happened, or against the new baseline this gain already became?" If you can't name which baseline you're using, you can't yet tell whether a win has actually stopped delivering value or whether it's simply become the invisible floor you're now standing on.

4Examples Across Different Worlds

Compensation & HR
A $15,000 raise feels thrilling for about a month. Six months later, the employee isn't comparing their pay to how excited they felt on raise day — they're comparing it to peers earning more at the new level. A manager who assumes last year's raise is still doing motivational work today is measuring against a baseline the employee has already moved past. (Illustrative, composite scenario.)
Product & habit design
A fitness app's streaks and badges feel genuinely motivating for the first few weeks. To keep producing the same emotional lift, the app has to keep escalating — bigger streaks, new badge tiers, more notifications — because the user's baseline expectation adapted to the old reward level and stopped responding to it. (Illustrative, composite scenario.)
Personal finance
Someone moves from a studio apartment into a two-bedroom place after a raise. A year later, the two-bedroom feels like the bare minimum rather than a luxury — downsizing back would feel like a real loss, even though by any absolute measure their housing situation improved and stayed improved. (Illustrative, composite scenario — a pattern widely discussed in personal-finance writing as "lifestyle inflation.")
Career & promotion
A newly promoted manager feels on top of the world for a few weeks. By the third month, the new title is just "my job," and they've started comparing themselves to the next rung up rather than to where they stood before the promotion. (Illustrative, composite scenario.)
Consumer purchases
A new car feels remarkable for the first few weeks of ownership. A few months in, the owner starts noticing small flaws they never would have mentioned on day one — less because the car changed, and more because their baseline for "a good car" caught up to the one they're now driving.
AI & tool evaluation
Someone who started using an AI writing tool calls it "amazing" in week one and "kind of basic, honestly" by month three — not because the tool got worse, but because the quality that once felt remarkable became the new floor of what they expect from it by default.

5Worked Application

Situation: An employee's engagement scores spiked right after a promotion and a meaningful raise, then settled back to roughly their pre-promotion baseline within two quarters. Leadership's first read is that "the raise didn't work" and is asking whether the comp budget was wasted.

Applying the model: Before concluding the raise failed, the people team separates three different levers instead of treating "give someone more money" as one single, permanent intervention. A one-time pay increase is expected to produce a real but temporary lift as the employee's baseline adjusts upward to absorb it — that part isn't a failure, it's the treadmill doing exactly what the research predicts. What actually distinguishes a raise that "sticks" from one that doesn't is whether anything renewable was layered on top of it: unpredictable and varied recognition, visible growth in scope or skill, and honest conversations about what's genuinely changing for the person — sources of satisfaction that habituate more slowly than a fixed number landing in a bank account once.

ApproachWhat it actually deliversWhere the treadmill creeps in
One large, one-time raise, nothing else changesA genuine short-term lift right around the raise itselfMaximum — engagement drifts back once the new pay becomes the new normal
Repeated, unpredictable, varied recognition (spot bonuses, new challenges, public credit)Fresh, novel positive experiences that resist full habituation because they aren't identical each timeReduced — variety and unpredictability slow how fast the baseline catches up
Raise plus ongoing growth, autonomy, and mastery conversations tied to real scope changesBoth the one-time pay lift and a separate, slower-adapting source of satisfactionMinimized — income does its single job once; growth and mastery supply renewable satisfaction the raise alone can't

This is a composite, illustrative scenario built to show the mechanism, not a specific published case study. The underlying pattern — that absolute income gains face adaptation while variety, novelty, and non-material sources of satisfaction appear to resist it more — reflects the general direction of hedonic-adaptation and well-being research; exact timelines and magnitudes vary by person, role, and organization.

6Common Mistakes

Assuming adaptation means nothing matters. Adaptation is real but partial and uneven — it doesn't fully erase the effects of major, ongoing hardship or flatten every kind of gain and loss to the same zero. Treating the model as "nothing you do will ever make a lasting difference" overstates it badly.
Confusing it with simple sensory habituation. Getting used to a noisy air conditioner is your senses tuning out an unchanging input. The hedonic treadmill is specifically about subjective well-being and life satisfaction shifting over time after a real change in your circumstances — a related idea, but a different mechanism.
Using it to excuse under-investing in people. "Raises don't matter, so why bother" is the wrong lesson. The model explains why any single lever eventually stops producing the same lift — it's an argument for variety and renewal, not for giving up on compensation or recognition altogether.
Treating one data point as proof. An engagement score dropping two quarters after a promotion is consistent with the treadmill, but it's also consistent with a heavier workload, a team change, or unrelated life events. Adaptation is a plausible explanation, not an automatic verdict.
Assuming it works identically for every gain and loss. The research behind this model points to adaptation moving at different speeds and to different degrees depending on what changed — a pay bump and a chronic hardship are not interchangeable examples just because both are "something a person adjusts to."
Believing awareness alone cancels the effect. Knowing the hedonic treadmill exists reduces its grip somewhat but does not switch it off — the underlying recalibration happens gradually and mostly outside conscious control, which is exactly why structural fixes (variety, renewable sources of meaning) tend to work better than willpower.

7When Not to Use It

When the change just happened. A strong emotional reaction in the first days or weeks after a win or a setback is a normal, real part of the adjustment process — it's not something to dismiss immediately just because the model predicts it will fade later.
When the domain resists adaptation more than most. Follow-up research on hedonic adaptation suggests some kinds of hardship fade more slowly or less completely than a typical financial gain. Treating every form of struggle as something a person will simply "get used to" on the same timeline as a raise risks minimizing something genuinely lasting.
When you need to judge the experience itself, right now. This model explains how your baseline shifts over weeks and months — it has nothing useful to say about whether something is enjoyable or valuable to you in this exact moment.

9Try It Yourself: Prompt Builder

Answer a few questions and build a ready-to-use prompt for checking whether your current feeling about something is still fresh, or whether you're already judging it against a baseline it reset.

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This is the portable skill version of this model — written so you can hand it to any AI assistant and get the same thinking applied to your own gains, losses, and expectations.


      
      
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