An Economic Insight Into "Regret Aversion" 

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Regret is a situation where one is deeply sorry, pained or upset about something they have done or another thing they shouldn't have done. It can also stem from the fear of what one ought to have done to prevent a futuristic repercussion. In life regret is a thing especially in every aspect of life but i'll be narrowing it down to an economic aspect. Many times, people make decisions mostly to advert regret. It's an emotional state where people are guided by their fear of the unknown.

For example, having insurance is firstly an emotional decision before it is logical, and why is this? One of the major intent of buying into insurance is the fear of regret. A lot of people fear the unknown, they're in a comfortable financial position where they cannot help but spend recklessly, they're aware that, that continuous spending would eventually make them bankrupt hence, in a bid to avert that regret, they buy into insurance so that it could leverage for their mistakes or ostentatiousness.

Regret aversion is totally emotional, this is because most times it stems from caution, and as a result of this, it can create panic and unsavory situations. While risk aversion can be a check on one's excessiveness, the situation involved would determine if it's right or wrong. Now, the choice to buy into insurance might originate from fear, which makes it right, irrespective of the fact that it gets it root from an emotional point of view.

Gambling away money for example comes from risk aversion too. People who gamble originally have altruistic intents. Some wants to get out of debts, others probably needs Capital to raise a business, while gambling might not be the solution, many takes the risk, to avoid things like never being able to pay their debt or not having that money to actually start up their business. The two contrasting intents are actually emotion based, but the latter turns out to be totally right, while the former is wrong.

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In Crypto

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Regret aversion is a thing in Crypto, our choices to either buy, build HODL or sell often stems from an emotional point of view and this is because no matter how knowledgeable a person might be in the tokeconomics of crypto, we usually end up placing our preferential bias when we decide to put our money where our mouth is. For example, years back, so many people were debating if HEX was a scam or not. The people who choose to buy and stake it, for a really long time, mostly did so based on the fear of omission.

This is how shit coins eventually pumps. In a bid to avert the regret of loss, most people use their previous experiences to make new Choices, forgetting completely that a previous error might or might not be Influential in the outcome of a present situation. So in other to avoid the regret of missing out, people make an emotional decision over a rational one. While the official term is FOMO, the psychological/economic term would be called Risk Aversion

Now I won't say if HEX is a scam project or not, what I know is that people often project emotional judgement when they're aiming to mostly justify their decisions. The fear of commission is something else. Now due to the possibility of HEX being a scam, the fear of committing one's hard-earned money might likely become a mitigating factor which would make some people back out, thereby averting a possibility of regret. Now people try to avert regret, especially in situations where the consequence or the reward is often impactful.

People frequently do so, especially in situations where a particular decision is definitive in one's life. Take a look at hive for example, the decision to stay and build for many people is not because the future of the chain is certain, but their belief on the present and possible potentials of the blockchain. I mean this prospective potential is why many would stay because of the possible risk of omission, this is regularly predominant in so many situations as well.

Most people become what they are, due to the fear of aversion, my aunt became a landlord in the early 2000s because of her fear of being homeless and prevent displacement, she's however found herself in a good financial position, even if that wasn't the original intention. Another of my uncle, languished in prison for a long time because got into an illegal dealing which he thought could change his life totally. I've always known this uncle to fear poverty a lot.

And to avert the risk of like hood of being poor, be got into unscrupulous dealings which made the law caught up with him. This is two contrasting situations that shows that one's attempts to avert a possibility cam create a negative or positive outcome. However, being overly regretful or aversive of regret isn't totally good, as it can terminate the phases of due process. Truth is, we cannot totally avert every potential risks, and accepting this eventually makes us better. Mistakes, even in the most important aspects of money is inevitable and dwelling on risk eventually takes away the sting.

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Interested in some more of my works?

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People & Assets: A Probable Investment?

Emotions: The Impressions & Expression

War-torned (An Original Poem)

Sunk Cost On Limited Resources & Time

Crypto: An Aspect Into Personal Finance

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My name is @Josediccus, a young Nigerian entrepreneur who is a Vlogger, A Psychologist, Poet, Sports Writer/Analyst & Personal Finance Coach. I'm using my contents as a process to create shared meaning as well as create expressions through which people on/off hive can relate. I believe content is a process to be enjoyed and relished and I'm up for any collaborations in my field stated above. Cheers

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@Josediccus, your brother-in-pen & heart

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I'm hoping to reach more people who are broken at heart and spirit, so share on any platform or reblog

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