How does 'fear of regret' affect human decisions?



Behavioral economists

Daniel Kahneman and Amos Tversky once identified ``fear of regret'' as one of the main motivations for human behavior. The science magazine MIT Press Reader uses a dice game as an example to explain how fear of regret affects decisions.

How Fear of Regret Influences Our Decisions | The MIT Press Reader
https://thereader.mitpress.mit.edu/how-fear-of-regret-influences-our-decisions/



The MIT Press Reader cited the following games as examples:

・Prepare one red and white dice and two cups with the same appearance, and place one dice under each cup so that your opponent cannot see it.
・Shuffle the cup without lifting it
- Preface your opponent with the following: ``If you answer correctly, you will get $5 (approximately 730 yen), but if you answer incorrectly, you will not get anything,'' and then ask him, ``Which cup has the red dice in it?'' let them choose
・While holding out the chosen cup to the other person, ask, ``Are you sure this cup is okay?''

A

study by RL Reid, a psychologist at the University of Exeter, reported that when asked if they would change their cup, around 90% of subjects did not.



The MIT Press Reader cited two reasons why many subjects did not switch cups, even though the actual probability of correct answer was 50%: ``endowment effect'' and ``fear of regret.'' I am.

The 'endowment effect' is an effect where once you recognize ownership of an item, you feel it is more valuable than the same item you don't own. In this game, once you choose a cup, that cup will be replaced by another cup. You will unconsciously feel that your value has increased. Furthermore, when the experimenter holds out a cup in front of the subject, the cup enters the subject's personal space, amplifying the endowment effect.

Also, humans have a tendency to feel bad if they make a certain choice and it turns out to be the wrong choice, and in this game, after changing the cup they chose, they realized that their original decision was actually correct. When you realize that something is wrong, you tend to feel depressed.



These reasons showed why many subjects did not choose to change the cup when presented with the option.

In addition, MIT Press Reader found that as a way to find out how depressed you feel after making a wrong decision, ``When asked if you want to change the cup, the answer is 5 dollars if you don't change it and get it right, but if you change it and get it right you get 6 dollars.'' We recommend adding the option 'We'll give you about 880 yen.'

According to the MIT Press Reader, if the reward for changing the cup and getting the correct answer was $6, many subjects would not change their choice. In addition, in previous research, we increased the reward for correct answers with changes to $10 (approximately 1,470 yen) and $15 (approximately 2,200 yen). It has been shown that 50% of subjects change their choice when the reward is tripled. Furthermore, it was revealed that 90% of subjects changed their choice when the reward reached 10 times.



In his book Achievement Relocked: Loss Aversion and Game Design , author Jeffrey Engelstein writes, ``When I was in school, the advice I received was, ``When answering multiple-choice questions, go with your first instinct.'' I believe now that this advice may give you a better chance of getting the right answer. I feel it's better to keep the original choice and make a mistake than to make a different choice and make a mistake.'

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