Question

At times we all regret decisions. Does this necessarily mean we did not use the economic decision rule when making the decision?

Answer 1

Regret aversion proposes that when a person wants to take decision he faces anticipated regret.this incorporate in their choice their desire to reduce this possibility.regret is like a negative emotions.this is reputational component .this is how human learns from experience.if there is conscious anticipation then it creates a feedback loop .

This incorporate a regret term in the utility function which depends negatively on the realised outcome given the uncertainty resolutions.

As we know at times we all regret decision but it does not mean that we did not use the economic decision rule when making decision.because in economic decision we try to select optimum options .but it may be happened that one of them can gives negative outcome because there result is uncertain.we can not predict future actions and results accurately.its depends upon do many factors.