In academia, summer is the season for reflection. College campuses go quiet, email traffic slows, and there’s finally room to consider what’s made you proud and what you most regretted in the last two semesters. I briefly entertained the notion of sharing a list of wins and woes from the past academic year in this newsletter. But anticipating I’d soon come to regret that (ahem), I instead decided to devote this issue of Milkman Delivers to a Q&A about the science of regret and the impact it can have on our decisions.
In the category of wins, however, I do want to share one bit of very happy news: Choiceology was recently voted runner-up for the Best Podcast in Behavioral Science by the Global Association of Applied Behavioral Scientists (GAABS). Thanks so much for your support of the show, which just closed out a phenomenal 11th Season with a blockbuster finale on superforecasting. We’ll be back with new episodes in August to kick off Season 12!
This Month’s Recommended Listens and Reads
Selection Matters: In this recent Choiceology episode, I interviewed Brown University economist and bestselling author Emily Oster about selection bias, which can lead us to draw faulty conclusions from surveys, headlines and much, much more.
Get to Know Future You: This Wall Street Journal essay (adapted from UCLA marketing Professor Hal Hershfield’s excellent new book Your Future Self) highlights the proven benefits of creating a stronger connection with future you.
My Conversation with Annie Duke: Bestselling author, psychologist, and former poker champion Annie Duke recently interviewed me for her terrific Substack newsletter, and I think you might get a kick out of the conversation.
Q&A: Does regret matter?
In this Q&A from Choiceology, CalTech economics Professor Colin Camerer discusses research on regret and regret aversion.
Me: Could you define regret and some of the evidence that it affects our decisions?
Colin: Regret is a bad feeling about having made the wrong choice looking back. It’s somebody who took a wild shot and lost at the very end. One beautiful example of regret is a study of Olympic medalists. The original study shows pictures of Olympic medalists getting gold, silver, and bronze medals, but the pictures only show their faces. You’d think that the better your medal, the bigger your smile. But that’s not the case. The silver medalists are the least happy. Because the bronze medalists are comparing themselves downward to being fourth. They’re just happy they got a medal. But the silver medalists can’t help but think, “I wish I’d gotten the gold.”
A further element of regret, which is a little more disputed scientifically, is whether people avoid certain things because they expect to feel regretful. Like, they don’t ask somebody out on a date, or they don’t apply for a hard job. That’s regret aversion, and it may prevent us from taking chances.
Me: What do we know about regret aversion and how it plays out?
Colin: There’s no question that people feel regret. What’s under scientific debate is whether people anticipate a feeling of regret and, as a result, do or don’t do certain things. One very famous example is the Allais paradox, for which people are asked to make a choice between $1 million for sure, or an 89% chance of $1 million with a 10% chance at $5 million and a 1% chance that you get nothing. And people will often take the million because they’re fearful of choosing the gamble, even though it's technically the better choice to have a chance at $5 million. A bunch of really impressive experiments have illustrated this type of regret with modest amounts of money, too – not millions. And later experiments indicated it was sensitive to how people framed the chance that they’d get nothing.
Regret aversion depends a bit delicately on counterfactuals. Like, if you marry person A and not B, do you know what happened to B’s life, and how good your life would have been?
Me: It certainly makes sense to me that my fear of regret will depend on whether I expect to learn about the road not taken. Speaking of which, I know you have some really interesting research where you’ve mapped the neural signatures of regret to people’s stock purchases. Would you mind describing it?
Colin: We found that if someone bought a stock and sold it, and then it kept going up, they were reluctant to buy it again. But if it went down, they’re more eager to buy it again. What we think is going on is that when the stock goes up it generates a regret signal, and people don’t want to buy more of a stock they regret having sold too early. It’s almost like it’s tainted or poisoned. It’s not particularly rational, especially if you think there’s momentum in stocks. So, if the stock was at 10, you sold at 20, and you have a chance to buy at 30, you should be willing to buy, rather than hate buying.
We looked at neural pathways and found activity in part of the brain associated with the strength of regret. And people who had more brain activity associated with this regret signal were more unwilling to repurchase stocks that they’d sold too soon.
Me: Do you have any advice on avoiding mistakes we make when it comes to regret?
Colin: One thing that’s pretty clear is that when people look back on their lives, they don’t regret things that they tried and failed. They tend to regret inaction. So, “God, I really wish I’d taken that job, even though it was risky.” Or “I wish I’d moved to that city,” or “tried harder at my marriage.” So, if the wisdom of older people could somehow be injected into younger people, that might be very useful.
Me: Thanks for that wisdom, Colin. Without a doubt, status quo bias pushes us towards inaction and produces regret. I love that as a place to wrap.
This interview has been edited for clarity and length.
To learn more about Colin’s research and regret aversion, listen to the episode of Choiceology where we dig into the topic.
That’s all for this month’s newsletter. I’ll be taking the rest of the summer off from Milkman Delivers, but I’ll be back with new interviews in the fall, so stay tuned!
Katy Milkman, PhD
Professor at Wharton, Host of Choiceology, an original podcast from Charles Schwab, and author of the Wall Street Journal Bestseller How to Change