Regret Theory
Updated 2026-08-08
INTRODUCTION
English translation pending.
CORE DEFINITION
Regret theory, proposed by Loomes and Sugden, holds that decision makers do not evaluate options by expected utility alone. They also simulate the counterfactual, what would have happened had the other option been chosen, and weigh the anticipated regret or rejoicing. To minimize possible regret, people gravitate to conservative options or to expensive safeguards, buying insurance, choosing a recognized brand, following the crowd. These are not utility maximization but regret minimization, the comfort of knowing that if it goes wrong, I did what could be done. Qualification: the model adds counterfactual comparison to, not in place of, classical utility.
SCAFFOLDING EFFECT
Reduce cognitive load
- Emotional hedging: hedge the feeling of future blame, not only the financial loss, when choosing safeguards. - Regret audit: ask which option you could defend to yourself if the outcome were bad. - Ticket test: use anticipated regret to explain why a purchased ticket still gets used in the rain.
Anchor fast decisions
Alongside the utility of each outcome, the decision maker computes the counterfactual difference between what was chosen and what was not. Anticipated regret is a real cost entered into the choice, so options that protect against blame, insurance, the safe brand, the crowd, gain value. The behavior is consistent once the counterfactual term is included in the comparison.
MINIMUM ACTION
In progress 0/1Practice this model in one real situation:
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Source support: Explicit
- en.wikipedia.orghttps://en.wikipedia.org/wiki/Regret_(decision_theoryverified
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