that seriously underestimates how important the perception of fairness is. i'm with joel on that one.
as a side note, taking the emotional impact of your decisions into account is not acting irrationally. indeed, it's more rational than deciding things on a purely monetary basis, because it takes all possible inputs into account.
No, it's not about fairness; it's about loss aversion bias, and how it can lead to suboptimal economic outcomes. It leads to poor investment choices all over the place. People are worse off when they don't control for it.
as a side note, taking the emotional impact of your decisions into account is not acting irrationally. indeed, it's more rational than deciding things on a purely monetary basis, because it takes all possible inputs into account.