Regret aversion and information aversion

Emmanuelle Gabillon ()
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Emmanuelle Gabillon: BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique

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Abstract: Regret is a negative and counterfactual emotion that occurs when a decision maker believes her past decision, if changed, would achieve a better outcome. Regret is intrinsically related to the comparison of the chosen alternative outcome with the foregone alternative outcomes. The result of this comparison is influenced by the decision maker's information about the foregone alternative outcomes (feedback structure). In this paper, we use Gabillon (2020)'s model, which generalizes regret theory to any feedback structure. We show that a regretful decision maker exhibits information aversion. The anticipation of learning about the payoffs of the foregone alternatives decreases her expected utility. We use the concept of statistical sufficiency in order to classify the feedback structures according to their informational content. We show that the less informative the feedback structure is, the higher the utility of a regretful decision maker.

Keywords: Regret; Emotion; Information (search for similar items in EconPapers)
Date: 2022-12-14
New Economics Papers: this item is included in nep-mic and nep-upt
Note: View the original document on HAL open archive server: https://hal.science/hal-03898012v1
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