Regret Aversion

The best decision making tool I know of, and the framework within which I try to make most of my decisions, is the cost-benefit analysis.

The cost-benefit approach breaks down when you don’t have enough information to weigh all of the costs or benefits, or when the future costs or benefits are uncertain.

So my second framework is what I call “regret aversion.” My interest in the notion of regret started when I turned 18 and asked a few dozen adult friends what they regret not doing when they were 18. Interestingly, the #1 regret was not traveling more when they were younger. The regret question elicited an interesting set of responses and I followed up this idea with my post on asking questions in the negative.

Essentially, I have come to believe that many older people are haunted by the question “I wonder what would have happened if…” And that active 40 or 50 somethings regret not trying more things when they were younger. The regret can be as profound as “I regret not going to college” or as simple as “I wonder what would have happened had I mustered the courage to call that CEO I really respected and asked for help.”

While it’s no good being consumed with regret over a past you have no control over, it’s similarly no good to ignore the past and not try to learn from your decisions. Devoting an optimal amount of attention to the past is an elusive task indeed — I’m not convinced that complete detachment from the past is the best way to live. Most of the people I respect are reflective enough to have thought about their past and honest enough to harbor some regrets.

So, I regularly deploy the “regret aversion” rule of thumb: When in doubt, say yes. This will not eliminate regret from my life, nor is it a hard and fast rule (surely there are times when “No” is the right answer). But by doing more things, even relatively random things, if it doesn’t work out, at least I’ll know I tried (no “what if?”), and sometimes it actually does work out.

Let us remember in closing:

We regret the things we don’t do more than the things we do. – Mark Twain

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