Regret aversion
Regret aversion occurs when people fear that they will make the wrong decision. A consequence of regret aversion is people making suboptimal choices in effort to avoid this feeling. For instance, one might decide to invest in a popular, yet risky, stock option in effort to avoid regret if the stock ends up performing well. However, regret-averse people may equally fear the regret of making a choice, resulting in choice avoidance altogether.
Relevant Academic Papers
- Zeelenberg, M., Beattie, J., Van der Pligt, J., & De Vries, N. K. (1996). Consequences of regret aversion: Effects of expected feedback on risky decision making. Organizational behavior and human decision processes, 65(2), 148-158.
