Why are we getting richer but not happier? Why do lottery winners not have sustained happiness? Why are bronze medalists often happier than silver medalists?

"The first step to being happy is to understand why we're often unhappy," says economist and entrepreneur Nat Ware. In an entertaining and enlightening talk, Nat shows that we're bad predictors of happiness, and explains why this is. We make decisions based on actual outcomes, Nat says, but our happiness depends on relative outcomes. We've been seduced into a way of life that conspires against our contentment by making it near impossible for reality to live up to our expectations. It is this expectation gap – the gap between our expectations and reality – that Nat argues is a key reason we're unhappy. Nat challenges us to not relegate happiness to the world of art and the realm of hippies but to start taking happiness seriously. The answer is not to simply lower our expectations, but rather to change the very way in which we make decisions.

This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at http://ted.com/tedx