Regret and the Rationality of Choices
Posted: 11 Oct 2017
Date Written: October 10, 2017
Regret helps to optimize decision behaviour. It can be defined as a rational emotion. Several recent neurobiological studies have confirmed the interface between emotion and cognition at which regret is located and documented its role in decision behaviour. These data give credibility to the incorporation of regret in decision theory that had been proposed by economists in the 1980s. However, finer distinctions are required in order to get a better grasp of how regret and behaviour influence each other. Regret can be defined as a predictive error signal but this signal does not necessarily transpose into a decision-weight influencing behaviour. Clinical studies on several types of patients show that the processing of an error signal and its influence on subsequent behaviour can be dissociated. We propose a general understanding of how regret and decision-making are connected in terms of regret being modulated by rational antecedents of choice. Regret and the modification of behaviour on its basis will depend on the criteria of rationality involved in decision-making. We indicate current and prospective lines of research in order to refine our views on how regret contributes to optimal decision-making.
Keywords: regret, rationality, decision-weights
JEL Classification: D81, D87
Suggested Citation: Suggested Citation