Policy decisions at the organizational, corporate, and governmental levels should be more heavily influenced by issues related to well-being––people’s evaluations and feelings about their lives. Domestic policy currently focuses heavily on economic outcomes, although economic indicators omit, and even mislead about, much of what society values. We show that economic indicators have many shortcomings, and that measures of well-being point to important conclusions that are not apparent from economic indicators alone. For example, although economic output has risen steeply over the past decades, there has been no rise in life satisfaction during this period, and there has been a substantial increase in depression and distrust. We argue that economic indicators were extremely important in the early stages of economic development, when the fulfillment of basic needs was the main issue. As societies grow wealthy,

This paper relates a series of current development in the literature of economics and psychology as they relate to decision making by households and business firms. The first part of the paper reviews recent literature dealing with happiness and subjective wellbeing. In the second part of the paper recent developments in management science that make use of intuition and mental focus are related to firm profitability and improved economic efficiency. Both of these recent developments can provide critical insights into improving the “bottom line ” performance of policy makers, managers and society as a whole at both the macroeconomic and microeconomic levels. These ideas are then used to design to and develop a series of policy suggestions that refocus attention on the concept of subjective well being or happiness as opposed to economic utility maximization as well as the role of intuition and the concept of “flow ” in the decision making process. of top managers. We can summarize these ideas succinctly by focusing on two sets of variables relating to decision making and decision outcome in a two by two matrix summarized in the Table