Anticipating Regret When Making Investments in One’s Higher Education

This paper investigates the role that anticipated regret plays in investment decisions, particularly consumer education investment decisions. Regret is an emotion that plays a powerful role in consumer decision-making (Inman and Zeelenberg 2002), and is defined by Sugden (1985) as “the painful sensation of recognizing that ‘what is’ compares unfavorably with ‘what might have been’” (p. 77). It is backward-looking. Consumers sometimes learn after a decision that another alternative would have been optimal, which causes a sense of regret (Bell 1982). Studies have found that information about products after purchase (Cooke, Meyvis, and Schwartz 2001) and information about forgone alternatives (Iman, Dyer, and Jia 1997) play an important role in not only regret but also post-purchase satisfaction. Consumers expect to possibly feel regret about purchase decisions, and thus try to reduce future regret that may come with different choices (Simonson 1992). Therefore, consumers not may not only feel regret for a decision made in the past, but they may also feel anticipatory regret before the decision is actually made (Janis and Mann 1977). Anticipated regret is forward-looking and is the focus of the present study. We postulate that anticipated regret actually consists of two components, keep and drop regret, and both should be considered when studying consumer regret. Anticipated keep regret is defined as a situation where a consumer anticipates regret for continued in vestment in a situation and finds out later that they should not have invested. Anticipated drop regret represents a situation where a consumer anticipates regret for not continuing with an investment but later finds out that he should have. Both types of regret play an important role in the way consumers evaluate decisions. While existing research suggests that consumers may feel regret or anticipate regret for multiple reasons, this is the first study that attempts to define and explicitly study the factors that comprise anticipated regret.