Regret in experience-based decisions: The effects of expected value differences and mixed gains and losses.

Abstract

Previous research on experience-based decisions with complete feedback supports the idea that people generally prefer options that produce better outcomes most of the time. The current study explored whether this preference is modulated by differences in expected value (EV) and the presence or absence of occasional losses. Participants (n = 52) recruited through a crowdsourcing platform completed an online experiment that involved repeated choices between a safer and a riskier option while receiving complete feedback. The riskier option yielded a better outcome on 80% of draws so that choosing it minimized the probability of regret. Preference for the riskier option was high when it had the same EV as the safer option and all outcomes were gains, but it decreased when the safer option had a higher EV and when both options included occasional losses. These findings replicated the results of a preliminary experiment with undergraduate participants (n = 105). Outcome ratings obtained on 50% of trials showed large effects of regret and rejoicing, confirming that participants were sensitive to relative comparisons between obtained and forgone outcomes. Reinforcement-learning modeling indicated that the effects of unequal EVs and mixed outcomes could be accounted for by assuming combined encoding of absolute and relative outcomes and unequal weighting of gains and losses. Overall, our results suggest that minimizing the probability of regret is an important motivational factor in experience-based decisions, but structural features of the choice environment can modulate the extent to which decision makers follow this strategy.

Reinforcement learning in and out of context: The effects of attentional focus.

“…That is, they were significantly more likely to choose lower-valued options that were favored in their original encoding context over higher-valued options that were disfavored. We attribute this to participants in the Feelings condition attending more to the relative comparisons between obtained and forgone outcomes during the learning phase, as these comparisons strongly influence how people feel about the outcomes of their decisions and, consequently, the options that they choose (Hayes & Wedell, 2021;Loomes & Sugden, 1982;Mellers et al, 1997Mellers et al, , 1999. Because feedback was presented in separate local contexts, encoding relative comparisons at the expense of absolute outcome information should enhance context dependence.…”

“…The mechanism that it used to implement context dependence was inspired by regret theory (Loomes & Sugden, 1982); however, as we discuss below, other computational mechanisms are possible. Our model assumes that when decision makers receive feedback from multiple options, their attention may alternate between the magnitudes of the individual outcomes and the difference(s) between them (for similar models, see Bavard et al, 2018; Hayes & Wedell, 2021). The more attention gets allocated to the individual outcomes, the more likely it is that the decision maker will learn the values of options on an absolute scale.…”

“…As such, this model is well-suited for choice tasks that present complete feedback on chosen and nonchosen outcomes (later, we discuss how it might be generalized to partial feedback tasks; see General Discussion). We propose that when decision makers receive complete feedback, their attention may switch between the individual outcomes and the difference(s) between them (Hayes & Wedell, 2021). Consider a choice between two options i and j , and let ri(t) and rj(t) denote the reward produced by both options on trial t .…”

“…This manipulation was designed to bias attention toward either the absolute values of the outcomes or the differences between obtained and forgone outcomes, and thereby modulate the degree of context-dependent encoding. Our overarching hypothesis was that participants who reported feelings would be biased into attending more to comparisons between obtained and forgone outcomes, which form the basis of regret and rejoicing, and hence exhibit stronger context dependence than participants who reported expected outcomes (Hayes & Wedell, 2021;Loomes & Sugden, 1982;Mellers et al, 1997Mellers et al, , 1999. Participants in both groups were also compared with participants in a control group who were not given a secondary task.…”

“…If the difference is positive (i.e., obtained > forgone), rejoicing occurs; if the difference is negative, regret occurs. Building on this, we propose that when decision makers receive complete feedback, their attention may switch between the magnitudes of the individual outcomes and the difference(s) between them (Hayes & Wedell, 2021). A greater allocation of attention to the individual outcomes should be associated with a greater likelihood of encoding absolute values, whereas a greater allocation of attention to the differences between outcomes should be associated with a greater likelihood of encoding relative values that form the basis of regret and rejoicing.…”