Friday, March 6, 2009

The Power of Regret

If you saw Paul Krugman's column today, he took the Obama administration to task for its inaction on dealing with “zombie” banks – those so badly wounded they resemble the walking dead.

The penchant for inaction is not surprising. If we are going to err at something, we would rather err by failing to act. That’s because we tend to view inaction as a passive act – we didn’t do anything. And since we didn’t do anything, we feel less responsible for the consequences that follow.

This tendency was illustrated in a series of experiments conducted by NYU professor Justin Kruger and his colleagues. They looked at the test-taking practices of more than 1,600 college students. Not surprisingly, they found what others have found: students who changed their answers usually improved their score. In fact, changes from wrong to right outnumbered changes from right to wrong by margin of 2-to-1.

But more important is what the students revealed in follow-up interviews. The prospect of changing a right answer to a wrong one filled them with much more regret than the prospect of failing to change a wrong answer to a right one. In short, doing nothing was less regrettable than doing something -- even though, in both cases, they’d end up with the wrong answer.

Kruger also found that regret altered the students’ memories. When asked how often they had switched their answer and got it wrong, they overestimated. When asked how often they stuck with their first answer and got the problem wrong, they underestimated. Bottom line: the students remembered that sticking with the first answer as being a better strategy than it actually was.

“The paradox is even though the actual outcome of your answer-changing suggests that you should be doing more of it,” he said, “your memories of it suggest the very opposite.”

That’s the power of regret -- which, if Krugman is right, is an emotion we'll be feeling more of.