Foregone Alternatives Research Articles

The different roads not taken: Considering diverse foregone alternatives motivates future goal persistence

AbstractDecisions are rarely made in isolation. Instead, deliberation often occurs in the context of prior related choices. This article finds that goal‐inconsistent foregone alternatives, options that were previously considered but not chosen, shape how consumers subsequently pursue their goals. Going beyond previous research on foregone alternatives and consumer satisfaction, the current research suggests that how consumers mentally construe foregone goal‐inconsistent alternatives impacts how they evaluate their prior goal‐consistent choices, which will, in turn, impact their motivation to continue making goal‐consistent choices. Specifically, we find the foregone alternative diversity effect: consumers who consider having previously foregone diverse (vs. similar) goal‐inconsistent alternatives in favor of a goal‐consistent action then believe that they have made a greater sacrifice, which had more of an impact on their focal goal. As a result, they are then more likely to subsequently make goal‐consistent choices. Our findings hold across different types of goals (exercise: Study 1, healthy eating: Studies 2, 3, and 5, weight loss: Study 4), and both real and hypothetical choices. We also identify theoretically motivated boundary conditions for the observed effect of considering foregone alternatives.

A model of mood as integrated advantage.

Mood is an integrative and diffuse affective state that is thought to exert a pervasive effect on cognition and behavior. At the same time, mood itself is thought to fluctuate slowly as a product of feedback from interactions with the environment. Here we present a new computational theory of the valence of mood-the Integrated Advantage model-that seeks to account for this bidirectional interaction. Adopting theoretical formalisms from reinforcement learning, we propose to conceptualize the valence of mood as a leaky integral of an agent's appraisals of the Advantage of its actions. This model generalizes and extends previous models of mood wherein affective valence was conceptualized as a moving average of reward prediction errors. We give a full theoretical derivation of the Integrated Advantage model and provide a functional explanation of how an integrated-Advantage variable could be deployed adaptively by a biological agent to accelerate learning in complex and/or stochastic environments. Specifically, drawing on stochastic optimization theory, we propose that an agent can utilize our hypothesized form of mood to approximate a momentum-based update to its behavioral policy, thereby facilitating rapid learning of optimal actions. We then show how this model of mood provides a principled and parsimonious explanation for a number of contextual effects on mood from the affective science literature, including expectation- and surprise-related effects, counterfactual effects from information about foregone alternatives, action-typicality effects, and action/inaction asymmetry. (PsycInfo Database Record (c) 2022 APA, all rights reserved).

How Impulsivity influences the Post-purchase Consumer Regret?

Abstract Background The role of impulsivity in post-purchase consumer regret is unclear and intriguing because of the negative emotions that underlie both constructs. It is particularly important to examine the impact of impulsivity on the relationship between regret and the Emotionality dimension of the HEXACO model of personality. Objectives The purpose of this paper was to investigate the associations between consumer regret components: outcome regret and process regret, attention, motor and non-planning dimensions of impulsivity and Fearfulness, Anxiety, Dependence and Sentimentality domains of Emotionality. Methods/Approach The sample consisted of undergraduates from Zagreb, Croatia (M age = 25.93, 56% females). The correlation and the regression analysis were performed. We used the Baratt impulsivity scale (BIS-11), the HEXACO-PI-R Emotionality scale and the Post Purchase Regret Scale (PPRS). Results The PPCR total score was associated with the BIS-11 total score, attention and non-planning impulsivity. Regret due to foregone alternatives was related to attention and non-planning impulsivity, while regret due to a change in significance was related only to attention impulsivity. Regret due to under-consideration positively correlated with non-planning impulsivity. Conclusions The results indicate that relations between impulsivity and consumer regret have an important role in understanding consumer behavior and that impulsivity has a moderate association between consumer regret and Emotionality.

Regret in health insurance post‐purchase behavior

AbstractUnlike other forms of insurance, individuals with health insurance generally expect to make claims through the policy period. Selecting an appropriate level of cost‐sharing is difficult and individuals may, ex‐post, regret the choice of a less‐than‐suitable coverage amount. Using a national health insurance survey of private market consumers from 2013 to 2017, we evaluate the potential for post‐purchase regret in the health plan purchasing decision. We employ an ordered logistic model and find that consumers whose plan choices were likely financially dominated by a foregone alternative are significantly more likely to express regret through reporting significantly lower likelihood of renewal, even when controlling for confounding considerations including affordability, self‐assessed risk, and satisfaction with the plan.

Ignorance Is Bliss: A Game of Regret

Existing models of regret aversion assume that individuals can make an ex-post comparison between their choice and a foregone alternative. Yet in many situations such a comparison can be made only if someone else chose the alternative option. We develop a model where regret-averse agents must decide between the status quo and a new risky option that outperforms the status quo in expectation, and learn the outcome of the risky option, if unchosen, with a probability that depends on the choices of others. This turns what was previously a series of single-person decision problems into a coordination game. Most notably, regret can facilitate coordination on the status quo – an action that would not be observed if the agents were acting in isolation or had standard preferences. We experimentally test the model and find that regret-averse agents behave as predicted by our theory.

Park-and-ride lot choice model using random utility maximization and random regret minimization

This research aims to understand the park-and-ride (PNR) lot choice behaviour of users i.e., why PNR user choose one PNR lot versus another. Multinomial logit models are developed, the first based on the random utility maximization (RUM) concept where users are assumed to choose alternatives that have maximum utility, and the second based on the random regret minimization (RRM) concept where users are assumed to make decisions such that they minimize the regret in comparison to other foregone alternatives. A PNR trip is completed in two networks, the auto network and the transit network. The travel time of users for both the auto network and the transit network are used to create variables in the model. For the auto network, travel time is obtained using information from the strategic transport network using EMME/4 software, whereas travel time for the transit network is calculated using Google’s general transit feed specification data using a backward time-dependent shortest path algorithm. The involvement of two different networks in a PNR trip causes a trade-off relation within the PNR lot choice mechanism, and it is anticipated that an RRM model that captures this compromise effect may outperform typical RUM models. We use two forms of RRM models; the classical RRM and µRRM. Our results not only confirm a decade-old understanding that the RRM model may be an alternative concept to model transport choices, but also strengthen this understanding by exploring differences between two models in terms of model fit and out-of-sample predictive abilities. Further, our work is one of the few that estimates an RRM model on revealed preference data.

HIDDEN REGRET IN INSURANCE MARKETS

AbstractWe examine insurance markets with two‐dimensional asymmetric information on risk type and on preferences related to regret. In contrast to Rothschild and Stiglitz (), the equilibrium can be efficient; that is, it can coincide with the equilibrium under full information. Furthermore, we show that pooling, semipooling, and separating equilibria can exist. Specifically, there exist separating equilibria that predict a positive correlation between the level of insurance coverage and risk type, as in the standard economic models of adverse selection, but there also exist separating equilibria that predict a negative correlation between the level of insurance coverage and risk type. Since optimal choice of regretful customers depends on foregone alternatives, the equilibrium includes a contract that is offered but not purchased.

Torn between study and leisure: How motivational conflicts relate to students’ academic and social adaptation.

Research on motivational conflicts indicates that students’ difficulties during studying may result from tempting alternatives in the leisure domain. In the present set of studies, we addressed the question of whether academic motivation inversely has negative spillover effects on students’ leisure-related functioning, too. In the first 2 studies (N = 169 and N = 206), the self-regulatory impairment students reported after the decision for studying or socializing in a predefined study–leisure conflict was related to their general academic and social adaptation. Results provide 1st evidence for domain-specific drawbacks in students’ functioning, depending on which activity is interfered in situations of motivational conflict. In a 3rd study (N = 358), we replicated these findings based on idiographic conflicts. Furthermore, motivational interference is introduced as a crucial process that may underlie such adverse effects. It is demonstrated that after the decision for a focal action, the motivational strength of foregone alternatives continues to influence students’ self-regulation during both study and leisure activities. Findings are discussed with regard to the connection between study and leisure strivings, motivational conflicts, and academic motivation.

When Random Assignment is Not Enough: Accounting for Intentional Selectivity in Experimental Research

A common goal in marketing research is to understand how one evaluates products that have been filtered through some type of screening or selection process. Typical examples include post-choice satisfaction ratings, certain free recall tasks, or the development of consideration sets followed by brand choice. In such situations, behavior is contingent not only on the alternatives being evaluated, but the choice context in which they have become available, creating differing degrees of selectivity. In this paper, we consider situations in which a polytomous selection process limits which items offer up subsequent information. We propose that not flexibly modeling the correlation between choice and evaluation across conditions can lead to systematic, erroneous interpretations of co-variate effects on evaluation. We illustrate this by analyzing two experiments in which subjects choose among, and then evaluate, a frequently-purchased consumer good, as well as data first examined by Ratner, Kahn and Kahneman (1999). Results indicate not only strong selectivity effects, but that traditional specifications of the choice process – presuming the degree of selectivity is invariant across choice contexts – can lead to markedly different interpretations of variable effects. Our findings show that the size and composition of a choice set affects the degree of correlation between choice and evaluation, and further suggest that foregone alternatives can play a disproportionate role in selectivity. Moreover, failing to account for selectivity across experimental conditions, even in well-designed experimental settings, can lead to inaccurate substantive inferences about consumers’ choice processes.

Counterfactual Seeking

Decision makers faced with an opportunity to learn the outcome of a foregone alternative must balance anticipated regret, should that information be unfavorable, with the potential benefits of this information in reducing experienced regret. Counterfactual seeking, the choice to learn more about foregone alternatives, may be a functional, regret-regulating strategy for individuals already experiencing regret. Counterfactual seeking increases in response to dissatisfying outcomes (Studies 1 and 2). Counterfactual seeking is generally able to reduce dissatisfaction (Study 2), regardless of whether individuals personally chose to view this information or were randomly assigned to do so (Study 3). Moreover, both imaginative (vs. factual) thoughts about the foregone option and upward (vs. downward) counterfactual thoughts play a role in this improvement in satisfaction (Study 4). Regret thus has a complex influence in how individuals engage with counterfactual information.

Volunteering time decisions: a multi‐factor experimental study

Non‐profit organizations often seek volunteers to help staff a fundraising event. In the present research, an experimental study assessed volunteering time decisions for a fundraising event following manipulations of opportunity cost valence, opportunity cost avoidability and question order involving donating time and donating money. Opportunity costs represent foregone alternatives sacrificed (e.g. working) when engaging in an activity (e.g. volunteering), with valence of the opportunity cost indicating the appeal (positive or negative) of the foregone alternative and avoidability of the opportunity cost suggesting how easy it would be to forgo the alternative. Prospective donors are often asked to consider both volunteering time and contributing money, and these two questions posed to individuals can be varied in terms of order. The results of the experiment revealed that individuals intended to volunteer the most time when an opportunity cost was negative and avoidable. The lowest time donation intentions occurred when an opportunity cost was positive and less avoidable with individuals also being asked about donating money prior to being asked to donate time. The results highlighted the importance to non‐profit firms of considering opportunity costs potential volunteers face and suggested care in structuring the order of questions involving time and money posed to those individuals. Copyright © 2011 John Wiley & Sons, Ltd.

A New Model of Random Regret Minimization

A new choice model is derived, rooted in the framework of Random Regret Minimization (RRM). The proposed model postulates that when choosing, people anticipate and aim to minimize regret. Whereas previous regret-based discrete choice-models assume that regret is experienced with respect to only the best of foregone alternatives, the proposed model assumes that regret is potentially experienced with respect to each foregone alternative that performs well. In contrast with earlier regret-based discrete-choice approaches, this model can be estimated using readily available discrete-choice software packages. The proposed model is contrasted theoretically and empirically with its natural counterpart, Random Utility Maximization’s linearadditive MNL-model. Empirical comparisons on four revealed and stated travel choice datasets show a promising performance of the RRM-model.

Dialectics of institutional change: the transformation of social insurance financing in Israel

Social insurance financing is notoriously path-dependent, yet in Israel a series of unobtrusive changes ultimately led to the virtual elimination of employer contributions. This outcome is explained by combining insights into the politics and political economy of taxation with a theoretical approach to understanding institutional change which takes conflict seriously. Institutional arrangements typically emerge as settlements of inherently contradictory goals, and their foundational contradictions are not necessarily eliminated through processes of reproduction. Our case study illustrates how conflicting interests generate susceptibility to institutional change and shape its trajectories. While recent extensions to pathdependency theory suggest that institutions become vulnerable when returns decrease, we find that change may result from unbalanced returns (increasing for some while decreasing for others) or altered conditions which unleash repressed conflicts of interest. Further, in contrast to the expectation that institutional evolution follows a unidirectional path in which reversals are unlikely, we identify a dialectical trajectory which potentially includes the revival of seemingly foregone alternatives.

On the Missed Opportunity Cost, Gud, and Estimating Environmental Quality

The missed opportunity cost (MOC), i.e., all foregone alternatives while foraging in a patch, is an important aspect of the cost-benefit analysis of foraging patch use. When making between-environment comparisons it will often be the most important factor influencing behavior, but it has received less interest than other foraging costs. In this paper, we focus on differences between individuals living in different territories or home ranges and how giving-up densities of food (GUD) should reflect between-environment differences in habitat suitability. We then investigate the extent to which such differences depend on effects mediated through the cost of predation or MOC. We model different scenarios for individuals in different environments and review literature on empirical studies that investigate such scenarios. The modeling results show that all three components of the MOC (survival rate, marginal value of energy, and marginal value of time) depend on average resource availability in the environment. ...

Perfect competition: A case of “market-failure”

In this paper we research one of the corporate governance mechanisms, i.e. market for goods and services. We focus on perfect competition. We concluded with the explicit argument for letting loose the dogs of the Federal Trade Commission and the Antitrust Division of the Justice Department upon perfect competitors. Our main concern is the failure of mainstream economics to incorporate, properly and completely, the concept of foregone alternatives, into its analysis. The present paper is an attempt to trace out the some of the implications of this critical error for industrial organization.

Die Qual der Wahl: Die Bedeutung des Regret bei Kaufentscheidungen

Regret results from comparing the outcome of a chosen alternative to the outcome of a foregone alternative. Research shows that this emotion is highly relevant for consumer behavior and decision making, but in consumer research, only a few studies deal with regret. Most of these studies do not measure regret explicitly. And none of these studies include the antecedents of regret. They only examine the consequences of regret on consumer behavior, such as satisfaction. In contrast, the antecedents of regret, but not the consequences, has been a topic of interest in social psychology. Our research indicates that it is fruitful to analyze the antecedents of regret and its consequences together. Further we demonstrate that it is possible to summarize a wide variety of antecedents of regret. Last we measure regret explicitly with multiple item measures.

Conjunctive explanations: The effect of a comparison between a chosen and a nonchosen alternative

The present paper examines whether an explicit comparison between the effects of a chosen action and a foregone alternative reduces the strength of a conjunctive explanation for the chosen action. This possibility was suggested by correspondent inference theory, which argues that in explaining an action we focus on its unique or noncommon effects, while treating effects common to both the chosen and foregone alternatives as being uninformative about the intentions of the actor. This implies that a conjunction of two effects should be viewed as a poorer explanation when one of the effects is common to several alternatives. In the present study, the commonness of an effect was manipulated by comparing a condition in which only the effects of the choice were known, to one in which the effects of an alternative were also known and one effect was common to both the choice and its alternative. However, even though providing an explicit comparison between a choice and its foregone alternative did reduce the probability of the common effect, this had no effect on the conjunction of the common and noncommon effect. The only condition to have any important effect on the conjunction was one in which the actor was said to have chosen one alternative, but then at the last minute changed his or her mind. This last finding suggests that people may be increasingly likely to contrast a choice with an alternative as the choice becomes more unexpected.

Soviet Agriculture with and without Collectivization, 1928-1940

Was Soviet agricultural collectivization necessary, in the sense once used by Alec Nove concerning Stalin?' Was there a feasible alternative? Such questions raise manysided issues that may never be settled conclusively, yet collectivization was such a large and central aspect of Soviet experience that it compels continued attention. The present essay offers a limited and specific response to the question of a feasible alternative. Let us start with a compact summary of the results achieved by collectivization up to 1941, using evidence released by the USSR after Stalin died and estimates prepared by western scholars. Next come some hypothetical projections that focus on an alternative trend in the availability of animal tractive power, together with its potential consequences. This procedure leads to instructive comparisons between what actually happened and what might have developed in the absence of collectivization. The essay closes with brief comments on some policy implications. This effort to evaluate a major incident in economic history involves some cautious and limited rewriting of the record, intended merely to identify a central feature of the process and demonstrate its importance. The stress here is on the physical potential for output expansion that still lay in traditional Russian agriculture. Issues concerning terms of trade between the peasantry and the state require additional and separate attention. This paper thus adds only obliquely to the Barsov-Ellman-Millar discussion of agriculture's contribution to industrialization under the First Five-Year Plan,2 by suggesting that over a longer period there may have been a foregone alternative. Although the Bolsheviks concentrated on grain, this crop made up less than a quarter of the agricultural sector's 1928 output (see table 1). Livestock products (including furs and fish) accounted for more than a third of the value of agricultural output and more than 40 percent involved other field crops (cotton, sugar beets, vegetables and fruit, timber and firewood, hay, potatoes, oilseeds, tobacco). The annual gross output figures trace developments in each of these three subsectors of agriculture from 1928 through 1940.

A note on opportunity costs and migration analysis

The hypothesis that opportunity costs associated with foregone alternatives in moving from region i to region j significantly affect the migration decision has been proposed by Levy and Wadycki in the context of a regression model of migration. Their results for Venezuela were highly successful and additional evidence reported by Wadycki with United States data for 1955–60 also substantiated the basic hypothesis.