Would you rather finish in second or third place? Would you rather win a silver medal or a bronze medal? The right answer seems intuitive. What's there to think about? A silver medal is objectively better than winning a bronze medal. So what chump would want to finish in third place!
The answer, surprisingly, is: The chump who wants to be happy. If you want to be happy, third place is preferable to second place. The second place winner is consumed at what he missed out on - first place! The third place winner is consumed with what he almost missed out on - third place!
This idea is explored in, "When Less is More: Counterfactual Thinking and Satisfaction among Olympic Medalists":
Research on counterfactual thinking has shown that people's emotional responses to events are influenced by their thoughts about "what might have been." The authors extend these findings by documenting a familiar occasion in which those who are objectively better off nonetheless feel worse. In particular, an analysis of the emotional reactions of bronze and silver medalists at the 1992 Summer Olympics—both at the conclusion of their events and on the medal stand—indicates that bronze medalists tend to be happier than silver medalists. The authors attribute these results to the fact that the most compelling counterfactual alternative for the silver medalist is winning the gold, whereas for the bronze medalist it is finishing without a medal. Support for this interpretation was obtained from the 1992 Olympics and the 1994 Empire State Games. The discussion focuses on the implications of endowment and contrast for well being.
The rest of the paper is here. That paper and many others are contained in the fabulous Heuristics and Biases: The Psychology of Intuitive Judgment (here).
The paper tends to explain why I'm so happy, and don't have a high desire for status. I know what not winning any medal at all is like. I grew up in a family of 6 where the family annual income was $10,000 a year. Each day I feel very lucky to do what I do.
