Here is an excerpt from the BPS blog describing research on our ability to predict the future. Also of interest is Dan Gilbert and Tim Wilson’s work on this same topic.
Nick Sevdalis and Nigel Harvey gave 47 participants £10 each to split as they chose with an unseen stranger in another room. If the stranger rejected the amount they were offered as too mean, then both the participant and stranger would go away empty handed. The participants were asked how much regret and disappointment they expected to experience if their offer was rejected.
In fact, the task was fixed – there were no strangers, and every participant was told that their offer had been rejected. Immediately after receiving the rejection, the participants were asked to report how much regret and disappointment they actually felt. Participants who had made reasonably high offers experienced significantly less regret than they thought they would, and on average, all participants experienced less disappointment than they expected.
In a second experiment, 27 students were asked to predict the grade they would receive for a real piece of coursework and to say how much regret and rejoicing they would experience if their actual mark was higher or lower than they expected. After receiving their grade, they reported how the news actually made them feel.
Overall, the students underestimated the mark they received, but they overestimated how delighted this better-than-expected result made them feel. Together with the first experiment, the findings suggest we overestimate how despondent bad outcomes will make us feel, and we overestimate how pleased good outcomes will make us feel.
The researchers suggested that to improve our decision-making, we should discount how we think different outcomes will make us feel. “Anticipated regret is certainly a powerful decision cue,” they said. “Whether it is an effective one remains to be empirically demonstrated.”
Sevdalis, N. & Harvey, N. (2007). Biased forecasting of postdecisional affect. Psychological Science, 18, 678-681.