The Price of Regret

How much would you pay to avoid regrets? A new study (gated) by psychologists Niels van de Ven and Marcel Zeelenberg finds that people are willing to forgo direct benefits in order to avoid regrets. In two sets of experiments, the authors gave participants a lottery ticket and then offered to exchange the ticket for another ticket for the same lottery. The authors conclude that “[e]ven though they could receive a bonus for exchanging, many participants chose not to do so. Experiment 1 finds that a manipulation that prevented the anticipation of regret by offering the ticket in a sealed envelope made more participants exchange their ticket. Experiment 2 finds that an increased potential of regret over not-exchanging made more participants exchange as well. In both experiments the effect of the manipulation on choices is mediated by anticipated regret. The experiments show that people are willing to forego a material gain to prevent future regrets and that the reluctance to exchange lottery tickets is (partly) caused by regret aversion.” Related: the endowment effect and the Monty Hall Problem. (HT: BPS Research Digest) [%comments]


Gringo_Nordestino

Thomas Dolby as in "She blinded me with science" Thomas Dolby? He's an intersting cat from what I hear.

Princess Leia

The blog is pretty cool -- do they have the conference at Asilomar? Gorgeous place Monterey, every part. . .

Parktown

TED is cool -- the most interesting thing is the way the conference succeeds in generating and channeling audience feedback for every speaker.

Which raises an interesting question -- is there a way to actually discuss the Freakonomics (the book) on this site or ask questions about it?

metin

TED is now a tenant in my bookmarks. I will definitely attent the next TED conference. By the way, great job on 'Freakonomics.' Both the book and the blog. I've submitted it as a 'must read' for the execs in my company.

De Gustibus Non Est Disputandum

Freaknomics de manhã cedo

* Bom, após semanas de atraso, ontem alguém se lembrou de me dizer: "ei, você tem uma correspondência aqui". Então descobri que havia sido premiado com a nova tradução (6a ed) do Freakonomics. Comecei a ler e estou gostando. *...

J.D. Kern

Isn't this old news, a la Kahneman and Tversky?

zach

Isn't this just Prospect theory in action?

JohnMcG

This model of human behavior is what drives the market for extended warranties.

Companies manufacture the possibility of regret, and then sell insurance against it.

James Watson, Portland, Maine

"The experiments show that people are willing to forego a material gain to prevent future regrets and that the reluctance to exchange lottery tickets is (partly) caused by regret aversion."

Isn't this simply re-discovering that "Fear of Loss" can be a stronger motivator than "Desire for Gain?"

Mark

I pay to avoid regret every time there's a lottery pool at the office.

I will gladly pay a few bucks a month to avoid living the rest of my life thinking about my co-workers and their winnings.

Ian Kemmish

Since this is nothing more than a speculative post-hoc rationalisation, I offer my own: Maybe they just thought the envelope was empty?

The only things I regret are things which have happened. Selling at the bottom of the market. Buying at the top. Dating neurotic bullies.

If people were truly "regret averse" in the way that this simple generalisation suggests, then nobody capable of experiencing regret would ever go on a first date because of the near-certainty of intense regret later on (much greater, don't you agree, than not winning a lottery, something which happens to gamblers ten times a day), and the human race would have evolved into a race of people who don't feel regret.

That, as we know, hasn't happened. I'll take an experiment that has billions of subjects over thousand of centuries over one that has a few dozen subjects run over a single day, thank you.

AaronS

If someone gave me a lottery ticket, then offered me another one in exchange for the one they had given me, I would immediately suspect that they knew something I didn't know about my ticket (i.e., that it was a winner) and were trying to get it away from me.

I don't think this is "regret" matter. That is, I would not be NOT trading in order to prevent regret...but to preserve what I would assume would be a better chance of winning. I mean, who in the world would think that someone WANTED to give you a winning lottery number?

David R

The ungated study is here: http://arno.uvt.nl/show.cgi?fid=113718

Oj

i would pay a lot to get rid of the regrets in my life even though they have already cost me a fortune...

Spooner

If this study is valid, it shows that people are really, really stupid. It makes me wonder if I could be that stupid. A salesman once gave me a state lottery ticket, and since it would cost $1.00 to buy but the state only paid out half of all lottery sales, I knew it was worth 50?. So I sold it to a co-worker for 75?. People asked how I would feel if the ticket won $1,000,000. I replied that I would feel that I had made the correct, if unlucky, decision.

Kate

I personally would pay money to get rid of my regrets, no matter what the price would be. Having regrets are not fun and can play with your emotions. Also, if you have a guilty conscience, you will have many regrets.

lexie

I don't think I would get rid of regrets. Even though you hate regrets they give you experience so you don't make the same mistake twice. You may hate your decisions at that moment, you will learn from them in the long run.