Real and hypothetical endowment effects when exchanging lottery tickets: Is regret a better explanation than loss aversion?

Previous research showed that decisions to act (i.e., actions) produce more regret than decisions not to act (i.e., inactions). This previous research focused on decisions made in isolation and ignored that decisions are often made in response to earlier outcomes. The authors show in 4 experiments that these prior outcomes may promote action and hence make inaction more abnormal. They manipulated information about a prior outcome. As hypothesized, when prior outcomes were positive or absent, people attributed more regret to action than to inaction. However, as predicted and counter to previous research, following negative prior outcomes, more regret was attributed to inaction, a finding that the authors label the inaction effect. Experiment 4, showing differential effects for regret and disappointment, demonstrates the need for emotion-specific predictions.