Now or Never: Effects of Limited Purchase Opportunities on Patterns of Regret over Time

Abstract

Prior research has demonstrated that actions are regretted more than inactions in the short-term (omission bias e.g., Kahneman and Tversky 1982). We are interested in purchase situations where inactions (not buying) trigger greater regret than actions (buying). We show that in limited purchase opportunities, that is situations where the purchase decision cannot be reversed, not purchasing is seen as a loss and associated with greater short-term regret than purchasing, thus reversing the omission bias. Prior research also showed that action regrets tend to decrease over time, while inaction regrets often increase over time due to coping and availability of the foregone alternative (e.g., Gilovich and Medvec 1995). Using similar mechanisms, we argue that non-purchase regrets (inaction) should decrease over time. However, long-term utility qualifies when purchases are regretted and thus when we expect this long-term pattern of regrets to occur. We first test our hypothesized pattern of regrets for limited purchase situations with a field study that tracked actual purchase decisions of travelers on a cruise. We then replicate these findings in a controlled setting using a simulated purchase decision for an item of limited availability. Our third study uses a related scenario to compare limited to unlimited situations and explores the thought processes driving long-term regrets.

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