When We Won’t Part with a Lottery Ticket
In a scenario study, participants expected a lottery-ticket owner to demand more and feel more reluctant to sell when the draw was near. The authors link these judgments to anticipated regret and the ease of imagining still owning a winning ticket.
THE IDEA
When We Won’t Part with a Lottery Ticket
Seeking support for the link between anticipatory regret and counterfactual thought, we conducted a scenario study. In the scenario, two individuals were provided with the opportunity to sell a lottery ticket each had purchased. The manipulated variable was the temporal proximity to the drawing (1 hour vs. 2 weeks). Based on our anticipatory regret analysis, we predicted that people would be less willing to part with a ticket the shorter the temporal distance to the drawing. Our logic went as follows: When confronted with the situation described in the scenario, people anticipate the regret that selling a once-held winning lottery ticket would induce in them and factor this anticipatory regret into their decision about whether to sell the ticket. Furthermore, as predicted by norm theory (Kahneman & Miller, 1986), people’s anticipatory regret, along with their reluctance to sell the ticket, should increase with their ease of imagining themselves still owning the winning ticket. The more recently one sold the winning ticket, the closer will be the counterfactual world in which one was a winner and, therefore, the greater will be the experienced regret.
Participants read the following scenario and answered these questions:
Mr. K. and Mr. T. each purchased a ticket for a lottery with a multimillion-dollar jackpot. Subsequently, each man was approached by a friend who offered to buy his ticket. The friend approached Mr. K. 2 weeks before the draw and Mr. T. 1 hour before the draw. Each man had held his ticket for about 2 weeks when approached, and each had sufficient time to buy another ticket before the draw if he so wished.
Who do you think would want the highest price for his ticket?
Who do you think would be most reluctant to sell his ticket?
Who would have the strongest sense of having almost won the lottery if he were to sell his ticket and it won?
Who would experience the greatest amount of regret if he were to sell his ticket and it won?
Participants’ responses conformed to predictions. They predicted that the anticipatory regret generated by the prospect of selling a winning ticket would be greatest when the time to the drawing was the shortest. Now, it is difficult to see how participants’ predictions about Mr. K.’s and Mr. T.’s differential reluctance to sell their lottery tickets could derive from participants’ biased memories of their own ticket-selling experience. This is not to say that such a belief would not develop if people were in the custom of selling tickets. The results do suggest, however, that holding such a belief is not necessary to explain the greater reluctance to do so; they also raise the possibility that the holding of similar beliefs may not be necessary to explain other behaviors that have the feel of superstitions, such as reluctance to switch away from an existing choice.
When to use it
Understanding why people hold onto losing stocks or investments as earnings announcements or other key events near.
Explaining consumer behavior, such as reluctance to return a product shortly after purchase or to switch service providers.
Informing negotiation strategies—e.g., sellers can increase buyers' reluctance to walk away by highlighting the regret of missing out.
Designing interventions to help people make more rational decisions by recognizing and mitigating the influence of anticipatory regret.
FROM THEORY TO EVERYDAY LIFE
In practice
Lottery Ticket Selling Scenario
Two individuals, Mr. K. and Mr. T., each purchase a lottery ticket. Mr. K. is approached 2 weeks before the draw, Mr. T. 1 hour before. Participants predicted that Mr. T. would be more reluctant to sell, have a stronger sense of almost winning, and experience greater anticipatory regret.
Reluctance to Switch Stocks
An investor holds a stock that is about to announce earnings. As the announcement approaches, the investor becomes increasingly reluctant to sell, fearing the regret of missing out on a gain if the stock rises after being sold.
A MOMENT TO REFLECT
Put it to work.
Think of a time you held onto a possession or investment as a deadline approached. How did anticipatory regret influence your decision?
Can you identify a situation where you or someone else avoided a change due to the fear of regret, even when the change might have been beneficial?
How might the concept of anticipatory regret apply to everyday decisions, such as selling a used item or buying a non-refundable ticket?
Often confused with
References
- Norm theory: Comparing reality to its alternatives — Kahneman, D., & Miller, D. T. (1986)
CONTINUE THE CONVERSATION
Source texts
- Heuristics and Biases The Psychology of Intuitive Judgment (Thomas Gilovich, Dale Griffin, Daniel Kahneman)