The Power of Regret: How Looking Backward Moves Us Forward(48)

In the Powerball case and many others, minimizing regret is not the same as minimizing risk. And if we don’t anticipate properly, we end up making the regret-minimizing choice rather than the risk-minimizing choice. Sometimes that means no decision at all. Regret aversion can often lead to decision aversion, many studies have shown.[28] If we focus too much on what we’ll regret, we can freeze and decide not to decide. Likewise, in studies of negotiation, focusing too much on anticipated regret actually stalled progress. It made negotiators risk averse and less likely to strike a deal.[29]

Your workday is nearing an end, but your obligations are not. Because you’re an ambitious sort, you’re also studying for a real estate license along with holding down your current job. Tonight is your first exam—eighty multiple-choice questions.

You gulp a cup of coffee and enter the exam room. You’ve got two hours to complete the exam. It’s going well. You’re proceeding steadily through the questions, marking your answers on the bubble form, when a thought occurs to you.

“On question twenty-three, I chose B. But now I think that C might be the right answer.”

Do you return to that question, erase your original response, and pencil in a new one? Or do you stick with your first instinct?

At every level of schooling and professional training, the advice that experts offer is consistent. In surveys, most college professors suggest that you stay with your initial instinct, because changing answers typically hurts student grades. The academic advisers at Penn State University concur: “[Y]our first hunch is usually correct. Don’t change an answer unless you are very sure of the change.” The Princeton Review, whose business is preparing students for every variety of standardized test, cautions: “Most times you want to go with your gut, rather than over thinking your answers. Many students just end up changing the right answer to the wrong one!”[30]

The conventional wisdom is plain: stick with your first instinct and don’t change the answer.

The conventional wisdom is also wrong. Nearly every study conducted on the topic has shown that when students change answers on tests, they are significantly more likely to change from a wrong answer to a right answer (sweet!) than they are to switch from a right answer to a wrong one (d’oh!). Students who change their answers usually improve their scores.[31]

So, why does this wrongheaded advice endure?

Anticipated regret distorts our judgment.

In 2005, Justin Kruger, a social psychologist now at New York University, along with Derrick Wirtz, now at the University of British Columbia, and Dale Miller of Stanford University examined the erasures on more than 1,500 psychology exams taken by students at the University of Illinois, where Kruger and Wirtz were then teaching. Consistent with previous research, switches from the wrong answer to the right answer were twice as common as switches from right to wrong.

But when researchers asked the students which they would anticipate regretting more—“switching when I should have stuck” or “sticking when I should have switched”—the responses were revealing. Seventy-four percent of those students anticipated more regret from switching answers. Twenty-six percent said it wouldn’t matter. And exactly none of the students anticipated greater regret from sticking with their initial answer.

Kruger, Wirtz, and Miller call this the “first instinct fallacy,” and it grows from anticipated regret gone awry. “Getting a problem wrong as a result of going against one’s first instinct is more memorable than getting a problem wrong because of failing to go against one’s first instinct,” they write. “The regret produced by switching an answer when one should have stuck with one’s original answer is enough to make the misfortune of having missed the question seem almost tragic.”[32] Haunted by the prospective specter of If Only, we err. You err, too. Because you didn’t switch your answer, you just missed passing the test and must take it again. If only you knew about this research earlier.

Anticipated regret—AR—can often make us better. But as your eventful day demonstrates, before you take this medicine, read the label.

Warning:

AR may cause decision paralysis, risk aversion, first instinct fallacies, and lower test scores.

As a universal drug, anticipated regret has a few dangerous side effects. But that’s not its only problem.



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Herbert Simon is one of the nearly one thousand people who’ve won the prize named for the regret-anticipating dynamite mogul we met earlier in this chapter. Simon was a masterful social scientist who taught at Carnegie Mellon University for fifty years and whose intellectual contributions spanned many fields, including political science, cognitive psychology, and artificial intelligence. But perhaps his greatest legacy was pushing the field of economics to consider the human dimension in its analyses.

In the pre-Simon world, the dominant economic models assumed that when people made decisions, their preferences were stable and they had all the information they needed, so they always tried to maximize their outcomes. In every instance, and at every moment, we sought to buy at the lowest price possible, sell at the highest price, and relentlessly maximize our gains.

Simon persuaded the economics profession that this assumption, while accurate in some cases, wasn’t always correct. Our preferences sometimes changed. Depending on a variety of factors, we often lacked the proper information to make the ideal decision. Besides, pursuing the very best deal everywhere in our lives could be exhausting. In many situations, we simply didn’t care sufficiently to find the perfect option—the ideal roofer, the peerless fast-food burger—and were willing to settle for good enough.