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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]