DECISION AFFECT THEORY:

Abstract— How do people feel about the outcomes of risky options? Results from two experiments demonstrate that the emotional reaction to a monetary outcome is nor a simple function of the utility of that outcome Emotional responses also depend on probabilities and unobtained outcomes Unexpected outcomes have greater emotional impact than expected outcomes Furthermore any given outcome is lets pleasant if an unobtained outcome is better We propose an account of emotional experiences associated with outcomes of decisions called decision affect theory. It incorporates utilities expectations and counterfactual companions into hedonic responses. Finally, we show that choices between risky options can be described as the maximization of expected emotional experiences as predicted by decision affect theory That is people choose the risky option for which they expect to feel better on average.     

When the Unreal is More Likely Than the Real: Post Hoc Probability Judgements and Counterfactual Closeness

Occasionally, people are called upon to estimate probabilities after an event has occurred. In hindsight, was this an outcome we could have expected? Could things easily have turned out differently? One strategy for performing post hoc probability judgements would be to mentally turn the clock back and reconstruct one's expectations before the event. But if asked about the probability of an alternative, counterfactual outcome, a simpler strategy is available, based on this outcome's perceived closeness to what actually happened. The article presents five studies exploring the relationship between counterfactual closeness and counterfactual probability. The first study indicates that post hoc probabilities typically refer to the counterfactual rather than the factual outcome. Studies 2-5 show that physical, temporal, or conceptual proximity play a decisive role for post hoc probability assessments of counterfactual events. When margins are narrow, the probabilities of, for instance, winning a match (when losing), and of losing (when actually winning) may even be rated higher than the corresponding probabilities of what really happened. Closeness is also more often referred to, and rated to be a better reason for believing there is a “good chance” of the counterfactual rather than of the factual result occurring. Finally, the closeness of the alternative outcome in success and failure stories is shown to be significantly correlated to its rated probability.     

The excess choice effect: The role of outcome valence and counterfactual thinking

Contrary to economic theory, psychological research has demonstrated increased choice can undermine satisfaction. When and why this ‘excess choice effect’ (ECE) occurs remains unclear. Building on theories of counterfactual thinking we argue the ECE is more likely to occur when people experience counterfactual thought or emotion and that a key trigger is a negative versus positive task outcome. Participants either selected a drink (Experiment 1) or chocolate (Experiment 2) from a limited (6) versus extensive (24) selection (Experiment 1) or were given no choice versus extensive (24) choice (Experiment 2). In both experiments, however, the choice was illusory: Half the participants tasted a ‘good’ flavour, half a ‘bad’ flavour. As predicted, extensive choice was only detrimental to satisfaction when participants tasted the ‘bad’ drink or chocolate, and this was mediated by the experience of counterfactual thought (Experiment 1) or emotion (Experiment 2). When outcomes were positive, participants were similarly satisfied with limited versus extensive and no choice versus extensive choice. Implications for our theoretical understanding of the ECE and for the construction of choice architectures aimed at promoting individual satisfaction and well‐being are discussed.     

The costs of optimism and the benefits of pessimism

Research suggests that optimism feels good. However, does it always feel good? We suggest that the benefits (and costs) of optimism and pessimism depend on their timing. A study of exam score estimates revealed that, after controlling for actual exam performance, optimistic expectations are unrelated to how people feel immediately before feedback, in contrast to the common wisdom that optimism "feels good." Furthermore, optimism has costs after feedback-participants who predicted higher scores before feedback felt worse after learning their scores. Finally, people seem to be aware of the potential costs of optimism-participants who predicted higher scores before feedback also anticipated experiencing greater disappointment should they perform poorly. These findings suggest that people may proactively manage their expectations to avoid the costs of optimism.     

Mental contrasting of counterfactual fantasies attenuates disappointment,regret, and resentment

Negative emotions elicited by positive counterfactuals about an alternative past—“if only” reconstructions of negative life events—are functional in preparing people to act when opportunities to restore the alternative past will arise. If the counterfactual past is lost, because restorative opportunities are absent, letting go of the negative emotions should be the better solution, sheltering people from feelings of distress. In six experimental studies, the self-regulation strategy of mental contrasting (Oettingen, European Review of Social Psychology 23:1–63, 2012) attenuated the negative emotions elicited by positive fantasies about a lost counterfactual past, specifically, disappointment, regret and resentment. Mental contrasting (vs. relevant control conditions) led people to feel less disappointed when evaluating their lost counterfactual past compared with their current reality, indicating reduced commitment to the lost counterfactual past (Studies 1, 2, 3, and 4), and it attenuated post-decisional regret and resentment (Studies 5 and 6). These findings held when participants were induced to focus on lost counterfactual pasts for which they were responsible (Studies 4 and 5), for which they blamed another person (Study 6), or for which they deemed no one responsible (Studies 2 and 3). The findings are relevant for building interventions that help people to come to terms with their lost counterfactual past.     

Good luck and bad luck: how to tell the difference

Good luck implies comparison with a worse counterfactual outcome, whereas bad luck implies upward comparisons. People will accordingly describe themselves as particularly lucky after recollecting situations where they avoided something negative, and as particularly unlucky after recollecting episodes in which they missed something positive (Study 1). Upward and downward comparisons can be created by the way a situation develops, and are accentuated by the way a story is told. Good luck stories typically change for the better only in the last stage, whereas bad luck stories show a more steady downward progression (Study 2). This is also reflected in phrases believed to be characteristic of good luck versus bad luck stories, with good luck stories involving surprise and reference to close counterfactuals, whereas bad luck stories focus on initial normal events (Study 3). Good and bad luck imply different orders of events (negative–positive versus positive–negative), so by rearranging the narrative sequence, the same set of outcomes can form the basis for a good luck story as well as a bad luck story (Study 4). The final experiment (Study 5) shows that negative outcome expectations are typical for chance‐determined and uncontrolled situations. Under such circumstances, factual outcomes do not have to be exceptionally good to be considered as lucky. Copyright © 1999 John Wiley & Sons, Ltd.     

Imagining how you'd feel: the role of motivational experiences from regulatory fit

The authors propose that how people imagine they would feel about making a choice is affected not only by the outcome's anticipated pleasure or pain but also by regulatory fit. Regulatory fit occurs when people pursue a goal in a manner that sustains their regulatory state and it intensifies the motivation to pursue that goal. Considering positive outcomes fits a promotion focus more than a prevention focus, whereas the reverse is true for negative outcomes. Thus, it is proposed that anticipating a desirable choice is more intensely positive for promotion than prevention, and anticipating an undesirable choice is more intensely negative for prevention than promotion. The results of three studies support these predictions. Studies 2 and 3 also demonstrate that motivational intensity underlies the stronger responses. Thus, to understand fully what it means to feel good or bad about a prospective choice, motivational experiences from regulatory fit must be considered.     

Causal attributions for success and failure in relation to expectations of success based upon selective or manipulative control

Subjects worked at a 10-item Anagrams Test. In a manipulative control condition the prior performance of subjects on a set of practice anagrams was controlled so that half of these subjects began the test with high expectations of success and half with low expectations of success As a check on the manipulation, subjects provided ratings of how confident they were that they could pass the test (i e, solve five anagrams or more) In a selective control condition subjects were not given practice items but were subsequently assigned to high versus low expectation groups on the basis of their confidence ratings The difficulty level of the items in the Anagrams Test was manipulated so that half the subjects in each condition passed the test and half failed. Subsequently all subjects were required to rate the degree to which they considered ability (or lack of ability), effort (or lack of effort), task difficulty (easy or hard), and luck (good or bad) were causes of their performance outcome (success or failure). It was found that the expected success was attributed more to ability and less to good luck than was the unexpected success The expected failure was attributed more to lack of ability and less to bad luck than was the unexpected failure There was a greater tendency for subjects to appeal to task difficulty and effort as causes of their performance when they succeeded than when they failed. These results were discussed in terms of a structural balance model of attribution behavior and also in relation to Heider's naive analysis of the causes of action     

Spontaneous counterfactual thoughts and causal explanations

We report two Experiments to compare counterfactual thoughts about how an outcome could have been different and causal explanations about why the outcome occurred. Experiment 1 showed that people generate counterfactual thoughts more often about controllable than uncontrollable events, whereas they generate causal explanations more often about unexpected than expected events. Counterfactual thoughts focus on specific factors, whereas causal explanations focus on both general and specific factors. Experiment 2 showed that in their spontaneous counterfactual thoughts, people focus on normal events just as often as exceptional events, unlike in directed counterfactual thoughts. The findings are consistent with the suggestion that counterfactual thoughts tend to focus on how a specific unwanted outcome could have been prevented, whereas causal explanations tend to provide more general causal information that enables future understanding, prediction, and intervention in a wide range of situations.     

The agony of victory and thrill of defeat: Mixed emotional reactions to disappointing wins and relieving losses

Because of counterfactual comparisons, good outcomes that could have been better (i.e., disappointing wins) and bad outcomes that could have been worse (i.e., relieving losses) elicit relatively middling ratings on bipolar emotion scales. We conducted two experiments with gambles to examine whether such outcomes elicit neutral emotions, sequentially mixed emotions of positive and negative affect, or simultaneously mixed emotions. In Experiment 1, static unipolar measures of positive and negative affect revealed that disappointing wins and relieving losses elicit mixed emotions, rather than relatively neutral emotions. In Experiment 2, participants provided continuous unipolar measures of positive and negative affect by pressing one button whenever they felt good and another button whenever they felt bad. Results revealed that disappointing wins and relieving losses elicit positive and negative affect simultaneously, rather than in alternation.     

Hazards mean luck: Counterfactual thinking in reports of dangerous situations and careless behavior

It has been shown (Teigen, 1995) that experiences of "luck" in daily life are dependent upon the existence a worse and close hypothetical (counterfactual) outcome, rather than upon a positive evaluation of what actually happened. The present investigation focuses on the inverse relationship, namely whether a situation with a negative outcome close at hand will be perceived as lucky. To test this hypothesis, students were asked to describe dangerous situations (Experiment 1) and examples of careless behavior (Experiment 3) from their own lives, which subsequently were rated by the actors and by peer groups for good and bad luck, attractiveness, and for closeness and attractiveness of the counterfactual outcome. Dangerous situations and episodes involving careless behavior were generally regarded as more lucky than unlucky. Furthermore, degree of good luck was positively correlated with degree of dangerousness and with degree of carelessness. Luck was related to closeness, aversiveness, and (in Experiment 2) to estimated probability of the counterfactual outcome. It is concluded that luck is primarily determined by negative outcomes that did not happen, and thus a frequent by-product of risk taking and risk exposure.     

Good fortune but bad luck? Predictable versus unpredictable gains and losses in risky choice

This study examines the effects of two different types of good and bad experiences on risk‐taking preferences: fortune and luck. We define fortune as a relatively stable positive or negative context within which choices are made and luck as a more unpredictable series of better or worse outcomes. With the use of a lottery‐based paradigm, fortune was operationalized as a preponderance of all‐gain or all‐loss two‐outcome option pairs within a larger set of mixed‐outcome control lotteries. Luck was operationalized as the experienced frequency of better versus worse outcomes when playing the lotteries. We predicted that fortune and luck would lead to opposite risk‐taking tendencies within control lotteries. An assimilation effect of fortune was predicted, with risk‐averse preferences for control lotteries when surrounded by good fortune and risk‐seeking preferences when surrounded by bad fortune. In contrast, we expected that high rates of success with good luck would lead to risk‐seeking preferences, whereas low rates of success with bad luck would yield risk‐averse preferences. Our predictions for fortune were confirmed; however, there was no evidence of any effect on risk taking based on experiencing good versus bad luck. Moreover, we observed a striking disconnect between impressions of the experience and risk‐taking behavior. Both identification and attributions of luck and fortune were highly correlated with the number of gain outcomes that participants experienced but were uncorrelated with risk taking. We review these surprising findings considering several prominent theories of risk‐taking behavior, particularly drawing attention to the differential roles of predecisional and postdecisional information in choice.     

The relationship between counterfactual thinking and emotional reactions to event outcomes: Does one account fit all?

By enabling a comparison between what is and what might have been, counterfactual thoughts amplify our emotional responses to bad outcomes. Well-known demonstrations such as the action effect (the tendency to attribute most regret to a character whose actions brought about a bad outcome) and the temporal order effect (the tendency to undo the last in a series of events leading up to a bad outcome) are often explained in this way. An important difference between these effects is that outcomes are due to decisions in the action effect, whereas in the temporal order effect outcomes are achieved by chance. In Experiment 1, we showed that imposing time pressure leads to a significant reduction in the action but not in the temporal order effect. In Experiment 2, we found that asking participants to evaluate the protagonists (“who ought to feel worse?”) led to a significant reduction in the temporal order but not in the action effect. The results suggest that the action and temporal order effects require different explanations and are consistent with other work that suggests that when decisions lead to bad outcomes a comparison of decision quality is an important determinant of the emotional response attributed to the protagonists. The stimulus materials used in our experiments may be downloaded from pbr.psychonomic-journals.org/content/supplemental.     

Feeling bad about progress does not lead people want to change their health behaviour

Objective: When do people decide to do something about problematic health behaviours? Theoretical models and pragmatic considerations suggest that people should take action when they feel bad about their progress – in other words, when they experience negative progress-related affect. However, the impact of progress-related affect on goal striving has rarely been investigated.

Design and Methods: Study 1 (N = 744) adopted a cross-sectional design and examined the extent to which measures of progress-related affect were correlated with intentions to take action. Study 2 (N = 409) investigated the impact of manipulating progress-related affect on intentions and behaviour in an experimental design.

Results: Study 1 found that, while engaging in health behaviours had the expected affective consequences (e.g. people felt bad when they were not eating healthily, exercising regularly or limiting their alcohol consumption), it was feeling good rather than bad about progress that was associated with stronger intentions. Study 2 replicated these findings. Participants induced to feel good about their eating behaviour had marginally stronger intentions to eat healthily than participants led to feel bad about their eating behaviour.

Conclusion: The findings have implications for interventions designed to promote changes in health behaviour, as well as theoretical frameworks for understanding self-regulation.     

Affective Impact of Close Counterfactuals: Implications of Possible Futures for Possible Pasts

Close outcomes have been shown to influence counterfactual thoughts and affective reactions. Not quite achieving a goal can be particularly disheartening, and just making it can be particularly uplifting. Prior research (Medvec, Madey, & Gilovich, 1995; Medvec & Savitsky, 1997) has demonstrated a satisfaction reversal: People who just miss a better outcome (e.g., losing by 1 point) actually feel worse than those who were not as close (e.g., losing by 10 points). It was hypothesized that this effect should depend critically on whether there are future possibilities. In Study 1, analyses of newspaper articles showed that reactions to a close game depended on whether it was the first or last game of a series. Study 2 demonstrated a new type of satisfaction reversal: At halftime, people felt better when their team was down by 1 point than if their team was up by 1 point. It is suggested that finality evokes contrast effects and that future possibilities evoke assimilation.     

Children's understanding of counterfactual emotions: Age differences,individual differences,and the effects of counterfactual‐information salience

The present study investigated developmental trends in the effects of the salience of counterfactual alternatives on judgments of others' counterfactual‐thinking‐based emotions. We also examined possible correlates of individual differences in the understanding of these emotions. Thirty‐four adults and 102 children, 5–8 years of age, were presented scenarios in which characters would be expected to experience regret. In one version of each scenario, the regret‐relevant counterfactual alternative was made more salient than was the case with the other version. Adults consistently judged that a character for whom a counterfactual course of events would have resulted in a better outcome would feel worse than a character for whom an alternative course of events would not have resulted in a more positive outcome. The majority of the children's judgments were not affected by the counterfactual alternatives. However, the judgments of the oldest children (the 8‐year‐olds) were significantly more adult‐like in the high‐salience than in the low‐salience condition. Although the three predictors examined in the present study (verbal ability, working memory capacity, second‐order false belief task performance) together accounted for significant variance in performance on the emotions judgment task, no single predictor alone accounted for significant unique variance in performance. The importance of different social cognitive abilities for understanding people's affective responses is discussed.     

When Possibility Informs Reality: Counterfactual Thinking as a Cue to Causality

People often engage in counterfactual thinking, that is, imagining alternatives to the real world and mentally playing out the consequences. Yet the counterfactuals people tend to imagine are a small subset of those that could possibly be imagined. There is some debate as to the relation between counterfactual thinking and causal beliefs. Some researchers argue that counterfactual thinking is the key to causal judgments; current research suggests, however, that the relation is rather complex. When people think about counterfactuals, they focus on ways to prevent bad or uncommon outcomes; when people think about causes, they focus on things that covary with outcomes. Counterfactual thinking may affect causality judgments by changing beliefs about the probabilities of possible alternatives to what actually happened, thereby changing beliefs as to whether a cause and effect actually covary. The way in which counterfactual thinking affects causal attributions may have practical consequences for mental health and the legal system.     

The bright side of brooding: State orientation increases positive emotions about positive outcomes

Research has by and large shown the negative effects of state orientation, that brooding over past events (i.e., state orientation) leads to more negative emotions and less well-being than quickly getting over past events (i.e., action orientation). However, this past research has primarily focused on how people cope with negative events and bad outcomes. The present research focuses on how people cope with positive events with good outcomes. Study 1 found that state-oriented people felt better after a windfall than action-oriented people. Study 2 found that state-oriented people felt not only worse when things turned out bad but also better when things turned out well than action-oriented people. Study 3 replicated the positive effect of state orientation on positive emotions with an experimental induction of action vs. state orientation. These results show that in positive situations state orientation can have emotional benefits – in other words, they show the bright side of brooding.     

Effect of Motivational Goals on the Causal Realism of Counterfactual Thoughts

Counterfactual thinking refers to mental comparisons of reality with imagined alternatives of it. The “functional view” of counterfactual thinking suggests that upward counterfactuals (which improve on reality) serve a preparative function and downward counterfactuals (which worsen reality) serve an affective function. This view presumes that people generate counterfactuals that focus on cause(s) that have actually produced the negative outcomes. The two experiments reported here demonstrate that people spontaneously manipulate the causal content of their counterfactuals, depending on their motivational goals. Specifically, it was found that when people aim to feel better about a poor decision they generate less realistic (upward) counterfactuals, experience less negative affect and tend to attribute the outcome to less controllable causes than when they aim to learn from their experience. The theoretical and practical implications of these findings are discussed.     

Dialectical beliefs and savings tendency: Opposite patterns in good versus bad current status

People often experience a dilemma: whether we should invest now for a better future or save now for an unexpected future. The current research investigated the influence of dialecticism, a constellation of lay beliefs stating that the world is full of constant changes, coexisting contradictions, and interdependent relationships, on people's savings tendencies when they are with good versus bad status. Study 1 verified that dialectical beliefs were negatively associated with optimistic expectations among people with good status (i.e., high socioeconomic status) but positively associated with optimistic expectations among people with bad status (i.e., low socioeconomic status). Next, Studies 2 and 3 examined the interaction effect between dialectical beliefs and people's current status in predicting their savings tendencies in the investment scenarios with the focus on savings decision‐making and emotional experiences related to savings scenarios, respectively. Finally, to test generalizability, Study 4 examined people's savings tendencies in the situation that they needed to prevent failure instead of doing investments. The results converged to support the hypothesis that stronger dialectical beliefs predicted greater savings tendencies among people with good current status but weaker savings tendencies among people with bad current status. These findings demonstrated that the effect of dialectical beliefs on savings tendencies varies as a function of the characteristics of the situations, which advances the theoretical understanding of dialecticism in decision‐making research.