One of the primary motivators of human behavior is avoiding regret. Before the legendary behavioral economists Daniel Kahneman and Amos Tversky formalized prospect theory and loss aversion, they believed that regret avoidance was at the root of the human behaviors they were studying. However, they learned that there are behaviors that regret avoidance could not explain and were led to a broader picture.
Let’s take a look at a simple game that sheds a bit more light on the psychology of regret.
I have two dice — one red, one white — and two identical cups. I secretly place one die under each cup (no trickery), mix them up, and ask you to select the cup with the red die. You did not see me put the dice under the cups, so you have absolutely no information on which to base your decision. If you make the right choice, I give you $5. If not, you gain nothing.