Regret aversion affects decisionmaking processes from "summary" of Advances in Behavioral Finance by Richard H. Thaler
Regret aversion is a common bias that affects decision-making processes. This bias stems from the fear of making a decision that may result in regret later on. Individuals tend to avoid making choices that could lead to feelings of regret, even if those choices may offer potentially greater benefits. When faced with a decision, individuals tend to weigh the potential outcomes based on the emotions associated with each option. The fear of regret can lead to a conservative approach, where individuals may choose the safer option rather than taking a riskier but potentially more rewarding path. Regret aversion can impact financial decision-making in various ways. For example, investors may be reluctant to sell a losing investment, ev...
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