Yes I know that there are a bunch of other threads on this. Most of them are quite old and dead, and there seems to be no good consensus as to how to proceed. I would like to revive the discussion.
I will outline what I think the best strategy is here, we all know what the problems with the current system are so I won’t go into that. The strengths of this strategy are that it tackles 90% of the issues with the current system, and is also very simple to implement. You would not even need to change any values on items, which given how many there are, would be a massive chunk of work.
The suggestion:
(Please note, any numbers given here are purely examples, any such system will need to be tested and tweaked to find out what works.)
Periodically, every in game minute for example, the character’s morale value is checked, and 10% of the value is added to a running total. This total ranges from -10000 to +10000 and decays back to 0 at a rate of 100 points per day. 1% of this running total is always added to the character’s actual moral value (but ignored for the purposes of calculating itself*)
The desired result:
Basically if you character has a really shit life he/she would eventually get so depressed that he can no longer function. All the exotic cooking recipes would suddenly have a purpose. Taking drugs and alcohol and reading books would become worthwhile activities. Basically the player is rewarded for making their character happy, and punished for making him/her suffer, but not to such a degree that it takes over the game.
Optional tweaks:
It seems that people can spiral into depressions much more easily than they can become permanently elated. It might be worth tweaking the system to take this into account. The decay could get much higher with a positive total and be based on how high the value is. Also ignoring the long term morale when adding to the total each period could be changed so that negative values are not ignored. This means if your character gets depressed there would be a real danger of spiraling out of control, but without the risk that players could just spend a week bingeing on chocolate bars and comic books and becoming so deliriously optimistic that nothing can get them down anymore.