Regret

REGRET

Regret is an emotion, and it is also a punishment that we administer to ourselves. The fear of regret is a factor in many of the decisions that people make (“Don’t do this, you will regret it” is a common warning), and the actual experience of regret is familiar. The emotional state has been well described by two Dutch psychologists, who noted that regret is “accompanied by feelings that one should have known better, by a sinking feeling, by thoughts about the mistake one has made and the opportunities lost, by a tendency to kick oneself and to correct one’s mistake, and by wanting to undo the event and to get a second chance.” Intense regret is what you experience when you can most easily imagine yourself doing something other than what you did.

Regret is one of the counterfactual emotions that are triggered by the availability of alternatives to reality. After every plane crash there are special stories about passengers who “should not” have been on the plane—they got a seat at the last moment, they were transferred from another airline, they were supposed to fly a day earlier but had had to postpone. The common feature of these poignant stories is that they involve unusual events—and unusual events are easier than normal events to undo in imagination. Associative memory contains a representation of the normal world and its rules. An abnormal event attracts attention, and it also activates the idea of the event that would have been normal under the same circumstances.

To appreciate the link of regret to normality, consider the following scenario:

Mr. Brown almost never picks up hitchhikers. Yesterday he gave a man a ride and was robbed.

Mr. Smith frequently picks up hitchhikers. Yesterday he gave a man a ride and was robbed.

Who of the two will experience greater regret over the episode?

The results are not surprising: 88% of respondents said Mr. Brown, 12% said Mr. Smith.

Regret is not the same as blame. Other participants were asked this question about the same incident:

Who will be criticized most severely by others?

The results: Mr. Brown 23%, Mr. Smith 77%.

Regret and blame are both evoked by a comparison to a norm, but the relevant norms are different. The emotions experienced by Mr. Brown and Mr. Smith are dominated by what they usually do about hitchhikers. Taking a hitchhiker is an abnormal event for Mr. Brown, and most people therefore expect him to experience more intense regret. A judgmental observer, however, will compare both men to conventional norms of reasonable behavior and is likely to blame Mr. Smith for habitually taking unreasonable risks. We are tempted to say that Mr. Smith deserved his fate and that Mr. Brown was unlucky. But Mr. Brown is the one who is more likely to be kicking himself, because he acted out of character in this one instance.

Decision makers know that they are prone to regret, and the anticipation of that painful emotion plays a part in many decisions. Intuitions about regret are remarkably uniform and compelling, as the next example illustrates.

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 learns that he would have been better off by $1,200 if he had switched to the stock of company B.

George owned shares in company B. During the past year he switched to stock in company A. He now learns that he would have been better off by $1,200 if he had kept his stock in company B. Who feels greater regret?

The results are clear-cut: 8% of respondents say Paul, 92% say George.

This is curious, because the situations of the two investors are objectively identical. They both now own stock A and both would have been better off by the same amount if they owned stock B. The only difference is that George got to where he is by acting, whereas Paul got to the same place by failing to act. This short example illustrates a broad story: people expect to have stronger emotional reactions (including regret) to an outcome that is produced by action than to the same outcome when it is produced by inaction. This has been verified in the context of gambling: people expect to be happier if they gamble and win than if they refrain from gambling and get the same amount. The asymmetry is at least as strong for losses, and it applies to blame as well as to regret. The key is not the difference between commission and omission but the distinction between default options and actions that deviate from the default. When you deviate from the default, you can easily imagine the norm—and if the departure from the default is associated with bad consequences, the discrepancy between the two can be the source of painful emotions. The default option when you own a stock is not to sell it, but the default option when you meet your colleague in the morning is to greet him. Selling a stock and failing to greet your coworker are both departures from the default option and natural candidates for regret or blame.

In a compelling demonstration of the power of default options, participants played a computer simulation of blackjack. Some players were asked “Do you wish to hit?” while others were asked “Do you wish to stand?” Regardless of the question, saying yes was associated with much more regret than saying no if the outcome was bad! The question evidently suggests a default response, which is, “I don’t have a strong wish to do it.” It is the departure from the default that produces regret. Another situation in which action is the default is that of a coach whose team lost badly in their last game. The coach is expected to make a change of personnel or strategy, and a failure to do so will produce blame and regret.

The asymmetry in the risk of regret favors conventional and risk-averse choices. The bias appears in many contexts. Consumers who are reminded that they may feel regret as a result of their choices show an increased preference for conventional options, favoring brand names over generics. The behavior of the managers of financial funds as the year approaches its end also shows an effect of anticipated evaluation: they tend to clean up their portfolios of unconventional and otherwise questionable stocks. Even life-or-death decisions can be affected. Imagine a physician with a gravely ill patient. One treatment fits the normal standard of care; another is unusual. The physician has some reason to believe that the unconventional treatment improves the patient’s chances, but the evidence is inconclusive. The physician who prescribes the unusual treatment faces a substantial risk of regret, blame, and perhaps litigation. In hindsight, it will be easier to imagine the normal choice; the abnormal choice will be easy to undo. True, a good outcome will contribute to the reputation of the physician who dared, but the potential benefit is smaller than the potential cost because success is generally a more normal outcome than is failure.