When Consumers Choose to Restrict Their Options: Anticipated Regret and Choice Set Size Preference

Abstract

The desire to minimize regret is one of the primary drivers of consumer decisions. Yet, consumers display a persistent preference for larger assortments even though they often feel regretful and dissatisfied after choosing from such an abundance of options. We propose that consumers do aim to minimize regret in their assortment choices, but the way in which they do so depends on the type of regret they are anticipating. While the anticipation of hot regret (i.e., the feeling of kicking yourself for having made the wrong choice) leads consumers to restrict their choice options, the anticipation of cold regret (i.e., the painful longing for missed opportunities) encourages consumers to keep their options open. Across five experiments, we demonstrate how subtle changes in the decision environment can influence consumers' assortment preferences by changing the nature of the regret they are anticipating.