scholarly journals Towards a Sociology of Regret

2019 ◽  
Vol 18 (4) ◽  
pp. 9-46
Author(s):  
Mikhail Sokolov
Keyword(s):  
Decision Making ◽  
Behavioral Economics ◽  
Expected Utility ◽  
Regret Theory ◽  
Anticipated Regret ◽  
Collective Actions ◽  
Sunk Cost ◽  
Human Decision ◽  
Future Self ◽  
Anticipate Regret

The paper looks into sociological implications of two discussions currently developing in behavioral economics and organizations theory: (1) regret theory, exploring the proposition that human decision making is governed by avoiding anticipated regret, rather than maximizing expected utility, and (2) studies of sunk cost fallacy, consisting in making decisions aimed at justifying previous decisions. We argue that these two areas of theorizing, presently isolated, are dealing with essentially the same phenomenon. This becomes evident if we recognize that choices are organized in sequences, with the merits of each particular choice being evaluated in the light of outcomes of the whole sequence. We then explore some general conditions of the ability to anticipate regret: interaction with one’s future Self and sequential organizations of states an individual find him/herself. We then discuss some widely spread forms of individual adaptations to the threat of experiencing regret: dissonance avoidance, prospective rationalization, cultivation of prescience, de-sequencing and open endings. We further explore various forms of collective actions involving regret avoidance, using the development of the sociological discipline as an example.

Anticipated Regret

2017 ◽  
Author(s):  
Marcel Zeelenberg
Keyword(s):  
Decision Making ◽  
Health Behaviors ◽  
Rational Choice ◽  
Rational Choice Theory ◽  
Choice Theory ◽  
Regret Theory ◽  
Anticipated Regret ◽  
Anticipate Regret ◽  
Better Than

Regret is the prototypical decision related emotion. It is felt when the outcome of a non-chosen alternative is better than the outcomes obtained. Regret is a functional emotion that helps people to correct mistakes. It is also functional because people can anticipate regret beforehand, then choose in such a way as to avoid regret from happening. Researchers in economics proposed regret theory, an alternative to rational choice theory, which takes into account the anticipation of regret and its influence in choice. Researchers in psychology studied how anticipations of regret influence decision making in a variety of domains, including health behaviors. The findings suggest that interventions can be developed that are based on the idea that people are regret averse.

Personality, Relationships, and Decision Making with Relational Dynamics

2015 ◽  
Vol 4 (4) ◽  
pp. 52-74 ◽  
Author(s):  
David S. Bathory
Keyword(s):  
Game Theory ◽  
Decision Making ◽  
Behavioral Economics ◽  
Personality Disorders ◽  
Economic Model ◽  
Economic Models ◽  
Relational Dynamics ◽  
Dsm V ◽  
Human Decision ◽  
Variable Probability

Within the field of Economics there is great interest in predicting the future. In creating Economic Models the rationale has been to create fixed equations that can account for all variables associated with the issues of capital, labor, wages, prices, tariffs and taxes but few models explored the human variable. Probability Statistics bases decision making models upon mathematical predictions. Game Theory is an economic model that begins to explain the rationale of human decision making, but fails to account for flawed thinking and pathology. Relational Dynamics attempts to provide a means of understanding the strategies used in communication and decision making. Within humanity, not all decisions are made rationally and to account for illogical choices, psychology has provided theories of pathology to explain human idiosyncrasies. This paper will explore personality disorders as described by the DSM V and Relational Dynamics in an attempt to understand how pathology influences relationships, decision making and behavioral economics.

Behavioral Decision Theory

2020 ◽  
Author(s):  
Kazuhisa Takemura
Keyword(s):  
Decision Making ◽  
Decision Theory ◽  
Behavioral Economics ◽  
Behavioral Finance ◽  
Utility Theory ◽  
Normative Theory ◽  
Behavioral Decision Theory ◽  
Behavioral Decision ◽  
Descriptive Theory ◽  
Human Decision

Behavioral decision theory is a descriptive psychological theory of human judgment, decision making, and behavior that can be applied to political science. Behavioral decision theory is closely related to behavioral economics and behavioral finance. Behavioral economics is an attempt to understand actual human economic behavior, and behavioral finance studies human behavior in financial markets. Research on people’s decision making represents an important part of these fields, in which various aspects overlap with the scope of behavioral decision theory. Behavioral decision theory focuses on the decision-making phenomena that are broadly divisible into those under certainty, those under risk, and others under uncertainty that includes ambiguity and ignorance. What are the theoretical frameworks that could be used to explain the decision-making phenomenon? Although numerous theories related to decision making have been developed, they are, in essence, often broadly divided into two types: normative theory and descriptive theory. The former is intended to support rational decision making. The latter describes how people actually make decisions. Both normative and descriptive theories reflect the nature of actual human decision making to a degree. Even descriptive theory seeks a certain level of rationality in actual human decision making. Consequently, the two are mutually indistinguishable. Nonetheless, a major example of normative theory is regarded as the system of utility theory that is widely used in economics. A salient example of descriptive theory is behavioral decision theory. Utility theory has numerous variations, such as linear and nonlinear utility theories. Most theories have established axioms and mathematically developed principles. In contrast, behavioral decision theory covers a considerably wide range of variations of theoretical expressions, including theories that have been developed mathematically (such as prospect theory) and those expressed only with natural language (such as multiattribute decision-making process models). Behavioral decision theory has integrated the implications of the normative theory, descriptive theory, and prescriptive theory that help people to make better decisions.

scholarly journals Risk Route Choice Analysis and the Equilibrium Model under Anticipated Regret Theory

2014 ◽  
Vol 26 (1) ◽  
pp. 33-43
Author(s):  
Pengcheng Yuan ◽  
Zhicai Juan
Keyword(s):  
Expected Utility ◽  
Equilibrium Model ◽  
Route Choice ◽  
Real Data ◽  
User Equilibrium ◽  
Equilibrium Analysis ◽  
Regret Theory ◽  
Anticipated Regret ◽  
Choice Behaviour ◽  
The Real

The assumption about travellers’ route choice behaviour has major influence on the traffic flow equilibrium analysis. Previous studies about the travellers’ route choice were mainly based on the expected utility maximization theory. However, with the gradually increasing knowledge about the uncertainty of the transportation system, the researchers have realized that there is much constraint in expected util­ity maximization theory, because expected utility maximiza­tion requires travellers to be ‘absolutely rational’; but in fact, travellers are not truly ‘absolutely rational’. The anticipated regret theory proposes an alternative framework to the tra­ditional risk-taking in route choice behaviour which might be more scientific and reasonable. We have applied the antici­pated regret theory to the analysis of the risk route choosing process, and constructed an anticipated regret utility func­tion. By a simple case which includes two parallel routes, the route choosing results influenced by the risk aversion degree, regret degree and the environment risk degree have been analyzed. Moreover, the user equilibrium model based on the anticipated regret theory has been established. The equivalence and the uniqueness of the model are proved; an efficacious algorithm is also proposed to solve the model. Both the model and the algorithm are demonstrated in a real network. By an experiment, the model results and the real data have been compared. It was found that the model re­sults can be similar to the real data if a proper regret degree parameter is selected. This illustrates that the model can better explain the risk route choosing behaviour. Moreover, it was also found that the traveller’ regret degree increases when the environment becomes more and more risky.

Measuring Utility, Destabilizing EUT

2018 ◽  
pp. 261-280
Author(s):  
Ivan Moscati
Keyword(s):  
Decision Making ◽  
Behavioral Economics ◽  
Expected Utility ◽  
Utility Theory ◽  
Expected Utility Theory ◽  
Behavioral Models ◽  
Decision Making Under Risk ◽  
Utility Measurement ◽  
Elicitation Methods ◽  
Series Of Experiments

Chapter 16 shows how the validity of expected utility theory (EUT) was increasingly called into question between the mid-1960s and the mid-1970s and discusses how a series of experiments performed from 1974 to 1985 undermined the earlier confidence that EUT makes it possible to measure utility. Beginning in the mid-1960s, in a series of experiments seminal to the field later called behavioral economics, Sarah Lichtenstein, Paul Slovic, Amos Tversky, and others showed that decision patterns violating EUT are systematic. The new experimenters who engaged with the EUT-based measurement of utility from the mid-1970s, namely Uday Karmarkar, Richard de Neufville, Paul Schoemaker, and coauthors, showed that different elicitation methods to measure utility, which according to EUT should produce the same outcome, generate different measures. These findings contributed to destabilizing EUT, undermined the confidence in EUT-based utility measurement, and helped foster a blossoming of novel behavioral models of decision-making under risk.

Behavioral Economics and Public Policy 102: Beyond Nudging

2015 ◽  
Vol 105 (5) ◽  
pp. 396-401 ◽  
Author(s):  
Saurabh Bhargava ◽  
George Loewenstein
Keyword(s):  
Climate Change ◽  
Public Policy ◽  
Decision Making ◽  
Health Insurance ◽  
Behavioral Economics ◽  
Policy Instruments ◽  
Design And Implementation ◽  
Alternative Approach ◽  
Human Decision ◽  
Policy Problems

Policymakers have recently embraced Behavioral Economics as an alternative approach which recognizes the limits and consequences of human decision-making. Early applications of BE (“nudges”) produced notable successes and helped to set the stage for more aggressive applications aimed at the deeper causes of policy problems. We contend that policies that aspire to simplify products and incentives, rather than choice environments, aggressively protect consumers from behavioral exploitation, and leverage BE to enhance the design and implementation of traditional policy instruments offer solutions commensurate with contemporary challenges. Case studies in health insurance, privacy, and climate change illustrate the application of these ideas.

scholarly journals A behavioral economics perspective on the COVID-19 vaccine amid public mistrust

2021 ◽  
Author(s):  
Jessica Londeree Saleska ◽  
Kristen R Choi
Keyword(s):  
Decision Making ◽  
Side Effects ◽  
Behavioral Economics ◽  
Cognitive Biases ◽  
Vaccine Development ◽  
Vaccine Uptake ◽  
Public Health Professionals ◽  
Human Decision ◽  
Vaccine Decision Making ◽  
To Receive

Abstract The COVID-19 vaccine development, testing, and approval processes have moved forward with unprecedented speed in 2020. Although several vaccine candidates have shown promising results in clinical trials, resulting in expedited approval for public use from the U.S. Food and Drug Administration, recent polls suggest that Americans strongly distrust the vaccine and its approval process. This mistrust stems from both the unusual speed of vaccine development and reports about side effects. This article applies insights from behavioral economics to consider how the general public may make decisions around whether or not to receive a future COVID-19 vaccine in a context of frequent side effects and preexisting mistrust. Three common cognitive biases shown to influence human decision-making under a behavioral economics framework are considered: confirmation bias, negativity bias, and optimism bias. Applying a behavioral economics framework to COVID-19 vaccine decision-making can elucidate potential barriers to vaccine uptake and points of intervention for clinicians and public health professionals.

Probability Dominance

2020 ◽  
Vol 102 (5) ◽  
pp. 1006-1020
Author(s):  
Enrico Diecidue ◽  
Haim Levy ◽  
Moshe Levy
Keyword(s):  
Decision Making ◽  
Prospect Theory ◽  
Expected Utility ◽  
Cumulative Prospect Theory ◽  
Economic Consequences ◽  
Regret Theory ◽  
Decisions Under Risk ◽  
Set Up ◽  
Winner Take All ◽  
Probability Dominance

The most commonly employed paradigms for decision making under risk are expected utility, prospect theory, and regret theory. We examine the simple heuristic of maximizing the probability of being ahead, which in some natural economic situations may be in contradiction to all three of the above fundamental paradigms. We test whether this heuristic, which we call probability dominance (PD), affects decisions under risk. We set up head-to-head situations where all preferences of a given class (expected utility, original or cumulative prospect theory, or regret theory) favor one alternative yet PD favors the other. Our experiments reveal that 49% of subjects' choices are aligned with PD in contradiction to any form of expected utility or prospect theory maximization; 73% are aligned with PD as opposed to preferences under risk aversion and under original and cumulative prospect theory preferences; and 68% to 76% are aligned with PD contradicting preferences under regret theory. We conclude that probability dominance substantially affects choices and should therefore be incorporated into decision-making models. We show that PD has significant economic consequences. The PD heuristic may have evolved through situations of winner-take-all competition.

Auctions with Anticipated Regret: Theory and Experiment

2007 ◽  
Vol 97 (4) ◽  
pp. 1407-1418 ◽  
Author(s):  
Emel Filiz-Ozbay ◽  
Erkut Y Ozbay
Keyword(s):  
Nash Equilibrium ◽  
The Other ◽  
Regret Theory ◽  
Anticipated Regret ◽  
Information Structures ◽  
Risk Neutral ◽  
Anticipate Regret ◽  
Theory And Experiment

This paper demonstrates theoretically and experimentally that in first-price auctions overbidding with respect to the risk neutral Nash equilibrium might be driven from anticipated loser regret (felt when bidders lose at an affordable price). Different information structures are created to elicit regret: bidders know they will learn the winning bid if they lose (loser regret condition); or the second-highest bid if they win (winner regret condition); or they will receive no feedback regarding the other bids. Bidders in loser regret condition anticipated regret and significantly overbid. However, bidders in the winner regret condition did not anticipate regret. (JEL D44)

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