Regret Aversion
Anticipated regret can favor a cautious choice, such as keeping an answer or arriving very early for a flight. Whether that choice is rational depends partly on the goal: maximizing a measurable return or avoiding an emotional cost.
THE IDEA
Is Fearing Regret Rational or Irrational?
Is behavior driven by anticipated regret rational or irrational? The answer depends on what the person is trying to maximize through his or her behavior. If a person’s goal is to maximize satisfaction rather than profit, then to be guided by anticipatory regret cannot be considered irrational. If changing a correct answer to a wrong answer causes a person much more pain than earning another point brings the person pleasure, then the person is hardly being irrational by refusing to change an answer that he or she thinks – but does not know for sure – is wrong. Similarly, if losing a point in tennis through double-faulting causes more pain than winning a point gives pleasure, then it is hardly irrational to have a weak second serve. Likewise, people can hardly be called irrational if their custom is to arrive at airports so early that they waste much more time than an occasional missed flight would cost them. The “if only” thoughts that arise when one arrives a few minutes late for a flight might be so aversive that people are happy to trade hours of boredom to ensure that they are never beset by the thought, “If only I had left a few minutes earlier, I would have made it.” However, if people do wish to maximize profit exclusively, then the beliefs we have focused on can more appropriately be termed irrational. In blackjack, whether refusing a card at 16 lowers expected profit depends on the hand, dealer’s card, and rules. The relevant question is whether avoiding regret changes the choice away from the one favored by the stated objective.
When to use it
An investor refusing to sell a losing stock to avoid the concrete regret of 'locking in' a loss.
A student deciding to stay in a safe, unfulfilling major rather than switching to a more exciting but riskier field of study.
A company executive maintaining the status quo on a failing project to avoid the personal regret of admitting failure and killing the initiative.
A patient choosing between a risky surgery with a high chance of a cure and a safer, less effective treatment to avoid the potential regret of a negative surgical outcome.
FROM THEORY TO EVERYDAY LIFE
In practice
Refusing to Change a Test Answer
A student does not change a test answer they suspect is wrong. The pain of changing a correct answer to a wrong one is much greater than the pleasure of earning another point. The person is not being irrational by refusing to change an answer they think might be wrong, but do not know for sure is wrong.
Weak Second Serve in Tennis
A tennis player develops a weak second serve. Losing a point through double-faulting causes more pain than winning a point on a powerful second serve gives pleasure.
Arriving Extremely Early at the Airport
A traveler arrives hours early for a flight. The aversive “if only” thoughts that come from narrowly missing a flight are so painful that they are happy to trade hours of boredom to guarantee they avoid those thoughts.
A MOMENT TO REFLECT
Put it to work.
Think of a recent major decision. Were you trying to maximize objective outcomes (profit, efficiency) or emotional satisfaction (avoiding regret, peace of mind)?
In the examples (test-taking, tennis, airports), the fear of regret leads to conservative choices. Can you identify a situation in your own life where this same mechanism caused you to miss a significant opportunity?
The text uses ‘profit vs. satisfaction’ as the key conflict. How does this framework apply to decisions involving ethics or relationships, where 'satisfaction' might involve complex moral emotions?
Often confused with
CONTINUE THE CONVERSATION
Source texts
- Heuristics and Biases The Psychology of Intuitive Judgment (Thomas Gilovich, Dale Griffin, Daniel Kahneman)