3 December 2012

You Will Regret Not Reading This… Regret and How it Influences Decisions

Bitter taste in your mouth, an almost physical pain, a lot of self-blame for not knowing or doing better and a rush of negative feelings are familiar to all humans (at least to the ones that are not sociopaths). It is REGRET. It is one of the most miserable feelings (or emotions as psychologists say) that a person can experience. Because regret is such a miserable feeling it is highly important for human life and particularly for decision making.

Let’s see first why regret is useful. Although aversive, from a pragmatic point of view regret is very useful. Experiencing regret is a psychological punishment for making a bad decision or choice in the past.

For example, imagine a guy called Frank who went out for a couple of beers with some friends and acquaintances. At one point, another group (friends of friends) joins Frank’s group and the new group suggests that from this point on they should drink only vodka and who doesn’t wants to will have to leave the table. Being under social pressure and not wanting to appear weak, Frank agrees despite the fact that he can’t drink more than 2-3 beers without getting really drunk. The next day, Frank has a horrible hang-over and an immense head ache. After he recovered from the side-effects of drinking vodka in huge quantities, Frank realized that his decision to stay on and “not look weak” was a stupid one. After all he barely knew the people that came at the table (new group). Moreover, he learned that he was brought home by some friends and his mother in law opened the door… Frank didn’t want to look weak in front of some strangers and make a fool of himself in front of his mother in law…

Knowing all this, Frank feels REGRET. He regrets making the decision of staying on and drinking vodka. The source of Frank’s regret is the fact that he knows he could have done better. He knows it would have been better if he would have simply excused himself after the first two beers and went home.

The regret that Frank experiences is a psychological punishment for a bad decision in the past. This punishment is usually useful for not doing the same mistake in the future.

Regret about decisions made in the past is called “Retrospective regret” or “Experienced regret” in the sense that the feeling is actually experienced.

Coming back to Frank’s feeling of regret, he regrets staying on and drinking vodka because he is aware of both (all) potential outcomes. He has just experienced a horrible hang-over and feels badly because his mother in law saw him drunk. At the same time, Frank is familiar with not having a hangover and not feeling bad about what his mother in law thinks of him.

This is a very important feature of regret, namely knowing the outcomes of all options. If in the case of Frank’s vodka adventure all potential outcomes are known, in other decisions we make or made we do not always know the outcomes of all the choices we make. Regret, by its very nature, is comparison based. We feel regret if we know or we can imagine the outcome of doing or choosing differently than we have done.

If (retrospective) regret is about bad decisions (choices) made in the past, then there are two sides of regret, namely outcome and process. 

The outcome regret refers strictly to the outcome of the decision. In the example of Frank’s vodka adventure, Frank feels regret with regard to the outcome of his decision, namely the hangover and the embarrassment in front of his mother in law. 

At the same time, the way in which we make a decision can be a source of regret. For example Frank can regret letting himself influenced by the other people around him at the pub. In other situations one can feel regret about making a decision without searching for more information, or for following the advice of sales people.

In brief, we feel regret about the outcomes of our decision and we feel regret about how we made the decision. These are called in scientific terms “Outcome regret” and “Process regret”.

Another interesting thing about regret is that it can occur for both doing and not doing something. For example if you own some assets and their price goes up and you decide to sell them. Next week (after selling them) you learn that the price has gone even higher. You will feel regret for selling the assets the previous week and not making a bigger profit. This is regret for acting or doing something.

Now imagine that you have some assets and their price goes up. You have a hunch that the price will rise even more the next week and you decide not to sell. Next week you learn that the price has collapsed. Now you will feel regret for not acting or not doing something.

Retrospective (experienced) regret acts as a psychological punishment for making a bad decision. The punishment can be for the outcome of our decision or for the way in which we made the decision. We can be punished for doing or for not doing something. The main role of retrospective (experience) regret is to make us learn to do better next time.

Apart from retrospective regret there is anticipated regret. If retrospective regret is to punish us for a bad decision so that we learn for the future, anticipated regret has the role of making us aware of the consequences of our decisions. Anticipated regret stimulates us to make (or at least try to make) better decisions.

As you know, regret is a miserable feeling and we humans are motivated to avoid it. If we become aware that we might experience regret in the future we have all the motivation to avoid it.

Thankfully, anticipated regret does not occur for each and every decision we make. If we go to the supermarket in the bakery section and choose ciabata over baguette we will not anticipate any regret and that is really good. For small and unimportant decisions we do not anticipate regret. Similarly for decisions that have a short term impact. The “ciabata” over “baguette” example is illustrative for both not very important decisions and for short term impact. After all, bread will be eaten fast.

Another feature of anticipated regret is that in order for it to occur, the decision maker has to learn the outcomes of both the chosen option and the forgone ones. Since regret by its nature is comparison based, in order to be experienced (or anticipated) the outcomes of the forgone options have to be known. However, I believe that anticipated regret can occur even in the absence of knowing the alternative outcomes, but if the decision maker is later unsatisfied with the outcome of the chosen option. In other words, we anticipate regret even if we will not find out what it would have been like if we chose another option.

A very good example of anticipated regret is the purchase of a house and subsequently taking a mortgage. It is a very important decision and it is a difficult one. Buying a house might not seem difficult, but trust me that it is. Taking a mortgage is very difficult since most (normal) people have virtually zero knowledge on complex financial products. Both the house and the mortgage have long term impact on the people who buy them. Although they might never find out the outcomes of buying a different house and of taking a different type of mortgage, the decision makers are aware that they might regret their choices in the future.  

To sum up about anticipated regret, it is meant to stimulate us to (try to) make good decisions. It occurs when decisions are difficult and important. When it is possible to find out the outcomes of both chosen and forgone options, anticipated regret becomes stronger.

Since regret is such a powerful and important emotion, people have developed ways to manage it (or strategies to regulate in a more sophisticated language). Next I will present the most common ways to manage regret.

Let’s talk first about managing retrospective or experienced regret. One approach of managing experienced regret is to decrease the importance of the decision. For example Frank might say “so what if my mother in law saw me drunk? It happens and other sons in law come home drunk daily. I only did it once.”

Another approach towards managing experienced regret is to focus on the decision. The first way in which we manage regret is to undo the decision if this is possible. For example if you regret buying those superb but extremely uncomfortable shoes, you can simply return them, thus undoing the decision to buy them.

The second way is to justify the decision that was the source of the experienced regret. For example if you regret buying the aforementioned shoes, you can simply say (think) that you need those shoes to fit in at the fancy party next week.

The third way is to deny the responsibility for the decision. For example, in the case of the uncomfortable shoes you can simply blame Gloria (your friend with whom you went shopping) for pushing you to buy them.

Since regret is by its nature alternative focused, another approach of managing regret is to focus on the forgone alternative. The first way of doing so is to switch to the alternative. For example if you regret buying the superb but uncomfortable shoes and not the less good-looking but more comfortable ones, you can simply go to the store and change the shoes.

The second way is to re-evaluate the alternative. For example, if you feel regret for buying the superb but uncomfortable shoes and not the less good-looking but more comfortable ones, you can say (think) that the more comfortable ones were much more ugly than the ones you bought and that the people at the party next week will not even notice them.

Another approach to managing regret is to focus on the feeling itself. One way of doing so is psychological repair work, which basically means “letting time to heal the feeling”. The second way is to suppress or deny having the feeling of regret.

Let’s talk now about managing anticipated regret. The first approach to manage anticipated regret is to decrease the importance of the decision. In essence this means saying (thinking) this decision is not so important.

The second approach to managing regret is to focus on the decision and there are four ways of doing so. The first way of managing anticipated regret is to increase the quality of the decision. For example if you think that you will experience regret after making the decision, you can look for more information on the topic or ask an expert in the field.

The second way of managing anticipated regret by focusing on the decision is to make the decision more justifiable. For example, you can make a list of reasons why you made (are ready to make) a particular choice.

The third way is to transfer the responsibility of the decision. For example, you can decide to go with the advice of a specialist in the field. Basically you are not really the one who makes the decision.

The fourth way is to delay or avoid the decision. For example if possible you will delay the decision to “sleep on it” or to give yourself more time to think about it… or you can simply postpone the decision forever.

The third approach to managing anticipated regret is to focus on the alternative. The first way of managing anticipated regret is to either restrict or enlarge the choice set (options available). For example if you have to choose a car out of 25 options, you could simply say (think) “let me focus on the ones that have a good fuel consumption” and thus restrict your decision to only 5 options. Another example is when faced with a difficult decision (and anticipating regret) you can say (think) “Let me see what other options are out there”.

The second way of managing regret by focusing on the alternative is to ensure decision reversibility. For example you can negotiate with the car dealer that if you don’t like the car you can return it in the next week after the purchase. However, ensuring decision reversibility has some side effects on satisfaction, namely that you will always think if you should reverse or not your decision.

The third way of managing regret by focusing on the alternative is to simply avoid feed-back on the forgone options. This basically means to ignore the outcomes of the options you did not choose. For example if you decide to go to a rock concert and not go to a jazz festival, you should not ask your friends “how was at the jazz festival?”.

The fourth approach of managing anticipated regret is to focus on the feeling itself. In essence this means that you acknowledge that regret might occur and try to deal with the feeling itself.

Up to this point I have described the emotion of regret and presented the most common ways in which people manage it. Now I would like to focus on the implications of regret in decision making, especially the business and social part.

In social life we often encounter the phrase “You will regret this”. Sometimes it is true, other times it is not. At the same time simply informing people about the fact that they will experience regret at a later stage has its shortcomings. I believe that focusing on how to avoid regret is more important. If we want to influence someone’s behavior or decisions it is, in my view, better to look at the strategies of managing regret both anticipated and experienced and focus on the solidity of one’s arguments. If someone wants to make a purchase that might result in regret, it means that that person is somehow managing anticipated regret.

For example if a friend intends to buy some very nice but very uncomfortable shoes, then it means that she is managing her anticipated regret. If you want her to change her mind it is useful to understand how she is managing the future regret and to use the same (counter)-arguments to convince her.

In business, regret is usually used in advertising in the sense of presenting the viewer with horrifying scenarios where she regrets not buying something. In my opinion, regret is much more important. Our choices and decisions that might result in regret (anticipated regret) are often poorly managed. I had the occasion of giving some attention to the role of anticipated regret in decisions with long term effects (buying a mortgage). The most common way of dealing with anticipated regret is to go to a “consultant” and it is not necessarily a bad choice. At the same time, other ways of managing anticipated regret are not used and many opportunities are lost.

If you have read till here, then you do not regret it.
Note: This post is documented from Pieters, Rik, and Marcel Zeelenberg (2007), “A Theory of Regret Regulation 1.0” and commentaries, Journal of Consumer Psychology, 17 (1), 3-35. 

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