The hierarchy of human needs and their social valuation

The purpose of this paper is to discuss the valuation of human needs within a given hierarchy. An important distinction is made between private utility and social relevance of needs.

The authors consider a generic hierarchy of needs in a world of similar agents. For the assumed pyramid, agents have to predict the current social value of a need that they will try to fulfill only at some future date. Several possibilities are explored about the way agents predict the social value of future needs.

It is found that if agents are unable to form an accurate forecast on the social value of a future need, distortions will eventually occur. Complex dynamics may emerge when agents try to learn future social values and use inaccurate learning algorithms.

The paper discusses how individuals measure the value of a need that is fulfilled in some future date. Results are dependent on the assumed learning algorithm. Different learning algorithms may lead to other kinds of long‐term implications.

The paper allows for a better understanding of how human needs can be valued.

It is highlighted that aggregate behavior on the evaluation of needs may be different from the behavior of an average agent.

In this paper, the notion of hierarchy of needs is combined with an assessment of how agents form expectations about future events. This furnishes a new paradigm of analysis that can be explored in related future work.