About This Project

We often learn the outcome of an unchosen option as someone else chose it. This means that our possibility to compare the choice made with unchosen alternatives (and potentially experience regret) depends on the decisions of others.

Using a mathematical model we predict that when people learn about unchosen options through the decisions of others, they will want to coordinate on the same choices - and may coordinate on suboptimal outcomes. We want to test this prediction through an experiment.

Ask the Scientists

What is the context of this research?

So far research in economics has focused on studying the role of regret in individual decisions. We argue that in many situations our possibility to experience regret depends not only on our own decisions, but also on the decisions of others. This is because the decisions of others may reveal information about the options we did not choose and thus generate regret.

Our theoretical model predicts that, when people learn about unchosen options through the decisions of others, they will have an incentive to coordinate on the same actions. This will allow them to avoid learning about unchosen alternatives and potentially experiencing regret.

What is the significance of this project?

While previous studies focused on individual decisions, our study will focus on how individuals are interconnected through regret. A better understanding of how regret connects individuals is important, as according to our predictions regret may lead groups to coordinate on suboptimal outcomes. As an example, in the context of technology adoption in developing countries, farmers are often slow to update to new and more productive technologies. Why? If they all stick to the existing technology, they will never know if the new technology is good. Ignorance is bliss, but it can also be suboptimal.

What are the goals of the project?

Our research question is whether people who experience and anticipate regret ("regret averse") coordinate on the same choice to avoid future regret.

To answer our question, we will run an experiment. The experiment includes two parts. In the first part, we identify regret averse people by asking participants whether they want to receive or avoid information about an unchosen option. Those who want to avoid information are classified as regret averse. In the second part, we split participants in pairs and ask again whether they want to receive or avoid information, but this time they can avoid information only if their partner chooses the same. Participants are also asked to guess their partner's decision. If they choose what they think their partner chose, they are trying to coordinate.