Few people doubt the merits of pausing to "think things through" before making a decision. Without doing so, we fear we may end up making a decision that leads to harm and misfortune. However, this process is itself a double-edged sword that can lead us astray.
We've all been forced to make tough decisions in life. From career progression and where to live to which route to take on a trip, we navigate life's choices by considering our options and weighing them against each other. In the context of these decisions, we attempt to predict the negative consequences from an action or decision and the likelihood that those consequences will actually occur.
Regret- we seek to avoid it when we can
In a famous study on Regret Theory, Loomes and Sugden present the idea that in making decisions, individuals not only consider the knowledge they have and the resources at their disposal, but also the likely scenarios that will result from their choices. They further suggest that the pleasure associated with the results of their choices depends not only on the nature of those results but also on the nature of alternative results. Individuals consider the regret their future selves may feel if they know they would have been better if they had chosen differently. Likewise, they consider the joy their future selves may feel if the consequences of their decisions turn out to be optimal. Thus, both a cause and a consequence of our desire to avoid losses (loss aversion) is our desire to avoid the pain of regret.
According to researchers, individuals exhibit “regret aversion” when they fear their decision will turn out to be wrong in hindsight. Sometimes, we engage in regret aversion before making a decision, leading us to hem and haw and lose out on opportunities. Other times, we engage in regret aversion after a decision is already made, leading us to hold on to losing assets or undesirable positions because we don’t want to admit our choice was not the best one. Many of the interventions that behavioral economists suggest, such as automatic enrollment, default options, and providing information to consumers, are set up to reduce the ex post regret individuals will face for not doing something that’s in their interest.
Not all regret is the same
In another study by Gilovich and Medvec, the authors compare two related trends in human thinking. They compare a frequently replicated finding that “people experience more regret over negative outcomes that stem from actions taken than from equally negative outcomes that result from actions foregone.” The finding comes from scenario experiment by Kahneman and Tversky (1982) that has been simulated and cited many times:
Most (92%) of the respondents thought that Mr. George, whose misfortune is the result of a decision he actively took, would experience more regret than the passive misfortune of Mr. Paul.
Mr. Paul owns shares in company A. During the past year he considered switching to stock in company B, but he decided against it. He now finds out that he would have been better off by $ 1,200 if he had switched to the stock of company B. Mr. George owned shares in company B. During the past year he switched to stock in company A. He now finds that he would have been better off by $1,200 if he had kept his stock in company B. Who feels greater regret? (p. 173)
Gilovich and Medvec go on to compare this finding to the popular belief that when people look back on their lives they tend to regret more often the things they failed to than the things they did. The authors reconcile this counterfactual thinking by by speculating that people get worked up over unfortunate—but ultimately inconsequential— decisions in the short run and forget them overtime, while bad decisions or failures to act that result in missed opportunities lead to thoughts about "what might have been" that deepen over time.
How to deal with regret
If you’re like me, you’re feeling a little down after reading all this research about regret… but here are some ideas for dealing with it:
- Don’t worry so much. People tend to overestimate how much regret they will feel in the future. Researchers from Harvard, Cornell and Virginia Universities conducted four separate studies to measure individuals’ anticipations and actual experiences of regret and self-blame. In the first study, students overestimated how much regret they would feel when they “nearly won” versus when the “clearly lost” a contest. In the remaining three studies, subway riders overestimated how much regret and self-blame they would feel if they “nearly caught” versus “clearly missed” their trains. These studies suggest people are less susceptible to regret over minor issues than they think.
- Keeping options open may not increase satisfaction. Most people like to maintain the option to reverse or change their decision/opinion at a later date to avoid regret. Ironically, doing so allows the individual to ruminate about their decision, limiting their memory capacity and lowering their satisfaction. It’s better to make a decision and move on.
- Get some perspective: good decisions can lead to bad outcomes and vice versa. Suppose someone offers to play a game with you. They will toss a coin, and if you guess correctly, you get $100.00. If you guess incorrectly, you owe them $10.00. You agree to play along. The coin is tossed and you lose. Was it a bad decision to play the game? No! The possibility of winning and losing was equal, but the potential gain from winning was much greater than the potential loss from losing. It was a good decision based on the information you had; it was simply a bad outcome. Life, of course, is not based on binary decision points like this one, but the lesson that we should not beat ourselves up for making “bad decisions” which might have been the right call at the time is an important one to remember.
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Photograph by stanley yuu via Flickr