Dysfunctional counterfactual thinking: When simulating alternatives to reality impedes experiential learning

Post-decision search in repeated and variable environments

When faced with a decision, people collect information to help them decide. Though it may seem unnecessary, people often continue to search for information about alternatives after they have already chosen an option, even if this choice is irreversible (e.g., checking out other cars after just purchasing one). While previous post-decision search studies focused on “one-shot” decisions and highlighted its irrational aspects, here we explore the possible benefits of post-decision search in the long run. We use a simple search task in which participants repeatedly decide whether to select the current alternative or continue to search for a better alternative. In a preliminary study we find that participants indeed conduct post-decision search even in unique environments, where information about forgone options cannot be used in future choices. In the main studies exposure to post-decision information was manipulated directly in unique environments, and was found to lead to better performance. The source of the observed improvement was further investigated with an explicit strategy elicitation methodology. We find that following exposure to post-decision information, people collect more data before generating thresholds. Thus, although post-decision search in unique environments might appear redundant, our results suggest it can help decision makers to modify their strategy and improve their future choices.

The Sin of Prediction

Experiential and associative learning are essential to optimal decision making. However, research shows that, even when exposed to repeated trials, people often fail to learn probabilities and cause/effect covariations. Consistent with the counterfactual inflation hypothesis, it is proposed that counterfactuals can interfere with memory of repeated exposures and therefore inhibit learning. Five experimental studies tested counterfactual thinking as a potential mechanism underlying this learning deficit using a simple, biased coin flipping paradigm. Participants were instructed to either simply observe or to predict and observe outcomes of a biased coin being flipped in multiple trials (Experiments 1-4). In all four experiments, counterfactual thought frequency mediated the relationship between task instructions and the extent of bias detection (i.e., learning). Experiment 5 showed that mental simulations of alternative outcomes were especially deleterious to learning and decision making. Findings are discussed in light of experiential learning theory and applied implications.

Fairness judgments and counterfactual thinking: pricing goods versus services

Purpose

– This paper aims to propose and empirically document the idea that people’s perceptions of having been treated fairly depend, in part, on whether the explanation provided to them of a product’s pricing is primarily based on the costs of labor (a service) versus materials (goods). Because materials are more fixed and tangible than the effort of labor, it is argued that people will have fewer counterfactual thoughts about how things could have been different with the cost of materials than those associated with labor. This has implications for fairness judgments more generally, as it suggests that people may be uneven in which types of data they attend to when making fairness judgments. Three experiments are presented that empirically test the relationship between the salience of goods versus services in the price paid and the resulting perceptions of fairness. Findings confirm that thoughts of money spent on a service were associated with lesser feelings of fairness than were thoughts of money spent on a good. This research uniquely identifies the mechanism by which some evaluations are considered fairer than others. Implications for organizational processes, such as procedural justice and fair compensation, are discussed.

Design/methodology/approach

– Three experiments are presented that empirically test the relationship between the salience of goods versus services in the price paid, and the resulting perceptions of fairness.

Findings

– Findings confirm that thoughts of money spent on a service were associated with lesser feelings of fairness than were thoughts of money spent on a good.

Originality/value

– This research uniquely identifies the mechanism by which some evaluations are considered fairer than others. Implications for organizational processes, such as procedural justice and fair compensation, are discussed.

The making of might-have-beens: effects of free will belief on counterfactual thinking

Counterfactual thoughts are based on the assumption that one situation could result in multiple possible outcomes. This assumption underlies most theories of free will and contradicts deterministic views that there is only one possible outcome of any situation. Three studies tested the hypothesis that stronger belief in free will would lead to more counterfactual thinking. Experimental manipulations (Studies 1-2) and a measure (Studies 3-4) of belief in free will were linked to increased counterfactual thinking in response to autobiographical (Studies 1, 3, and 4) and hypothetical (Study 2) events. Belief in free will also predicted the kind of counterfactuals generated. Belief in free will was associated with an increase in the generation of self and upward counterfactuals, which have been shown to be particularly useful for learning. These findings fit the view that belief in free will is promoted by societies because it facilitates learning and culturally valued change.

Pitfalls of counterfactual thinking in medical practice: preventing errors by using more functional reference points

Background

Counterfactual thinking involves mentally simulating alternatives to reality. The current article reviews literature pertaining to the relevance counterfactual thinking has for the quality of medical decision making. Although earlier counterfactual thought research concluded that counterfactuals have important benefits for the individual, there are reasons to believe that counterfactual thinking is also associated with dysfunctional consequences. Of particular focus is whether or not medical experience, and its influence on counterfactual thinking, actually informs or improves medical practice. It is hypothesized that relatively more probable decision alternatives, followed by undesirable outcomes and counterfactual thought responses, can be abandoned for relatively less probable decision alternatives.

Design and Methods

Building on earlier research demonstrating that counterfactual thinking can impede memory and learning in a decision paradigm with undergraduate students, the current study examines the extent to which earlier findings can be generalized to practicing physicians (N=10). Participants were asked to complete 60 trials of a computerized Monty Hall Problem simulation. Learning by experience was operationalized as the frequency of switch-decisions.

Results

Although some learning was evidenced by a general increase in switch-decision frequency across block trials, the extent of learning demonstrated was not ideal, nor practical.

Conclusions

A simple, multiple-trial, decision paradigm demonstrated that doctors fail to learn basic decision-outcome associations through experience. An agenda for future research, which tests the functionality of reference points (other than counterfactual alternatives) for the purposes of medical decision making, is proposed.