When people fear that their decision will turn out to be wrong in hindsight, they exhibit regret aversion. This bias is associated with risk aversion. Regret-averse people may fear the consequences of both errors of omission (e.g., not buying the right [optimal] investment property) and commission (e.g., buying the wrong [suboptimal] investment property) (Seiler et al., 2008). (See also loss aversion and sunk cost fallacy.)

 

Seiler, M., Seiler, V., Traub, S., & Harrison, D. (2008). Regret aversion and false reference points in residential real estate. Journal of Real Estate Research, 30(4), 461-474.

 

Previous Next