Counterfactual thinking and confidence in blackjack: A test of the counterfactual inflation hypothesis

This research tests the idea that repeatedly generating counterfactual thoughts in response to recurring events can lead to impairments in memory for actual outcomes (i.e., counterfactual inflation hypothesis). Participants (N = 56) played 40 games of blackjack and listed their thoughts after each win. They were instructed to list evaluative counterfactuals, reflective counterfactuals, or any thoughts that came to mind following each loss. Because reflective counterfactuals focus only on the alternatives to reality, and not in addition to reality (like evaluative counterfactuals), they were expected to lead to the greatest degree of overestimations of performance and confidence for future blackjack playing. The results confirmed this hypothesis, and also demonstrated that the relationship between thought-listing instructions and confidence for the future was mediated by overestimations of performance. Thus, repeatedly generating reflective counterfactual thoughts appears to lead to a special case of imagination inflation with dysfunctional implications for future confidence and risk-taking.