Myopic Regret Avoidance: Feedback Avoidance and Learning in Repeated Decision Making
Decision makers can become trapped by myopic regret avoidance in which rejecting feedback to avoid short-term outcome regret (regret associated with counterfactual outcome comparisons) leads to reduced learning and greater long-term regret over continuing poor decisions. In a series of laboratory ex...
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| Main Authors: | , |
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| Format: | text |
| Language: | English |
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Institutional Knowledge at Singapore Management University
2009
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| Online Access: | https://ink.library.smu.edu.sg/lkcsb_research/1076 https://ink.library.smu.edu.sg/context/lkcsb_research/article/2075/viewcontent/RebJMyopicRegretAvoidance_FeedbackAvoidance.pdf |
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| Institution: | Singapore Management University |
| Language: | English |
| Summary: | Decision makers can become trapped by myopic regret avoidance in which rejecting feedback to avoid short-term outcome regret (regret associated with counterfactual outcome comparisons) leads to reduced learning and greater long-term regret over continuing poor decisions. In a series of laboratory experiments involving repeated choices among uncertain monetary prospects, participants primed with outcome regret tended to decline feedback, learned the task slowly or not at all, and performed poorly. This pattern was reversed when decision makers were primed with self-blame regret (regret over an unjustified decision). Further, in a final experiment in which task learning was unnecessary, feedback was more often rejected in the self-blame regret condition than in the outcome regret condition. We discuss the findings in terms of a distinction between two regret components, one associated with outcome evaluation, the other with the justifiability of the decision process used in making the choice. |
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