Is Regret Avoidance Helping or Hurting Your Decisions? - THINKERS Notebook

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Is Regret Avoidance Helping or Hurting Your Decisions?

Regret sucks.

We can all agree on that, right?

It's why some variation of "living a life without regret" is often stated by people as a life goal.

It's also why one of the decision-making heuristics I rely on the most when faced with a difficult choice is: which decision am I likely to regret the most if I make it?

In fact, this came up last night when my wife and I were discussing whether we should take our daughter in preschool today or keep her home after seeing that the city of Dallas (where we live) had declared a state of emergency due to a handful of new confirmed cases of COVID-19.

As I often do, I immediately jumped to my comfortable regret avoidance heuristic:

 
  • On the one hand, I could absolutely foresee regretting taking her to school if she got sick and then possibly infected me or my wife or, even worse, one of our parents (who are the high-risk age group). Even if it's a small chance, the potential for significant regret seemed quite large.
  • On the other hand, keeping her home would make it a little harder for me to focus on getting work done (note: I work from home regularly) and would probably result in more TV time than I'm typically comfortable with. In this case, the likelihood for that regret seemed quite high, but the intensity of the regret would be small.

We ultimately decided to keep her home. Balancing the potential regret weighed heavily in our decision.

Was it the right decision? I don't know. There really isn't a way to know for sure. But I do know that viewing it through the prism of potential regret allowed me to make the decision and move forward without any ... ahem ... regrets, or second thoughts.

But here is something that I didn't consider, which I've since learned since sitting down to do the research for this week's newsletter ...

Using regret avoidance to aid in decision-making isn't the bulletproof heuristic I've always assumed that it is. And the main reason for this is the cognitive biases it introduces into our decision-making, on of which is known as loss avoidance.

Loss avoidance leads us to take a position or make a choice in an effort to ensure that losses do not occur. And you can see it quite clearly in the reasoning I used in my example above.

I framed the entire question as a way to avoid losing my daughter's current good health. And this meant that my entire decision-making process was biased toward doing what would avoid this undesirable potential outcome.

If I'm being honest with myself, the decision-making deck was pretty much stacked before I even started playing the hand. It's important to note: this doesn't necessarily mean that I made the wrong decision, but it does mean that my logic wasn't as comprehensive and complete as I may have assumed.

If I remove the loss avoidance from the equation, or simply try to balance it with the opposing perspective, I would have also weighed the potential positive outcomes of her going to school:

 
  • She would have had another day of fun with her friends.
  • She would have gotten social interaction and instruction rather than a day of just solo play and watching
    Finding Nemo.
  • I would have gotten a day of quiet at the house, which would have undoubtedly led to more focus and more productivity.


There are probably others, and they are all meaningful bullet points to consider when making the decision. But I didn't. Because as soon as I entered regret avoidance into my thought process, it dominated the discussion. This happens to all of us, in varying degrees.

So, given everything that I just wrote, if I step outside of the reinforced walls of regret and try to execute a more balanced decision-making process, would I have done anything differently?

In this case, no.

I still think keeping my daughter home today, and maybe for the next few weeks, is the right decision. The potential positives don't outweigh the potential negatives, at least in my own personal calculus.

But I am absolutely now more mindful of just how big of a blind spot I had framing the decision solely within the context of regret. It's something I'm going to really try to keep in mind moving forward, because the next regret-focused decision I make might not stand up to closer scrutiny like this one did.

Below, you will find three links to additional resources that will give you different perspectives on how regret can impact your decision-making.

But first a quick update from inside the THINKERS Workshop.

This Week in the THINKERS Workshop


I'm going to reiterate what I included in last week's newsletter, just in a different order. :-)

First, we need your help!

We are always looking to improve the THINKERS Workshop to make it more useful to you. So we created a short survey to get your feedback. Click here to take the survey.

And ... for all the iPhone users out there, we have a new version of the THINKERS App ready for testing! If you want to be a beta tester, install the app TestFlight and then click this link. (Instructions here.) 

Second, remember that the THINKERS Workshop exists to help you!

Make sure that you check out our series of mini courses that feature short videos explaining key concepts for better thinking.

One mini course in particular is called How to Create Habits for Better Thinking.

There are currently three video lessons in it, with more on the way. Here are direct links to the lessons:
 


If you are already a member of the THINKERS Workshop, you can access those video lessons at any time. And if you have questions or ideas for follow-up lessons, please leave a comment on the lesson itself (or reply to this email).

 



Now on to this week's links ...

Pay attention to the negative impact of your fear of regret


But why are we so easily manipulated? Regret is a highly important emotion that evolution equipped us with to facilitate learning. Without regret we can hardly learn from our mistakes. We need this painful stimulus to avoid repeating the same mistake again and again.

But the way our brain processes regret and determines the level of pain we experience is counterintuitive: missing a bus by one minute triggers more regret than missing it by ten (regardless how long we expect to wait for the next bus). Similarly, a decision to depart from the status quo that later proves to be wrong triggers more regret than making an unwise decision to remain within the status quo.

It seems that actively taking a decision to change something creates a false impression that the decision does not qualify for mitigating circumstances, making the punishment we inflict on ourselves through regret more severe.


Read: A fear of regret can lock us into bad relationships, jobs and habits – here’s how to break free (The Conversation)

Beware of the hidden biases that get mixed in with regret avoidance


Samuelson and Zeckhauser expect that a parent would feel more regret about leaving a baby alone than taking the baby in the (much more dangerous) car because it is a strong social norm not to leave a child unattended. Making decisions contrary to norms which result in bad outcomes have been shown to create more regret than bad outcomes where the decision was in conformity with norms.

The Norms Theory of Regret was proposed by Daniel Kahneman and Dale Miller in 1996 and states that regret occurs when a bad outcome occurs that causes the person to think about what could have happened differently. This is called counterfactual thinking and people think about counterfactuals more when they violate their (or society’s) norms.


Read: Regret Avoidance: A Key Factor in Decision-Making (The IFOD)

The impact of loss and control


The bottom line is that people feel more regret when they lost something but feel like they had the control to make a different decision.

To a certain extent this is part of the fear of loss which I will talk about a lot more. But fear of loss manifests in many different ways, and this is just one of them.

Even though the end result is the same, learning that we could have made more money, but that we messed up, made a mistake, and sold at the wrong time, feels worse.


Read: How trying to avoid regret changes our behavior (The Team W)
 



Quote of the week


"Regret is the worst human emotion. If you took another road, you might have fallen off a cliff. I'm content."

-- William Shatner

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