STATION ANNOUNCER: Next train to city center in one minute.
PASSENGER: No, no, no, no, no, wait.
STATION ANNOUNCER: Next train to city center in 10 minutes.
KATY MILKMAN: There’s something about just missing a train or a plane or maybe an appointment. When you’re so close to making it, it feels worse than missing it by a lot, even though you’d be in the same situation either way. Why is that? In this episode, we’re looking at the emotion triggered by near misses, an emotion that colors our experience of the past and can seriously affect our decisions about the future. I’m Dr. Katy Milkman, and this is Choiceology, an original podcast from Charles Schwab. It’s a show about the psychology and economics behind our decisions.
We bring you true stories involving high-stakes, make-or-break moments, and we explore the latest research in behavioral science to help you make better choices and avoid costly errors.
STIRLING HART: I would have got my first axe around the age of three or four.
KATY MILKMAN: This is Stirling.
STIRLING HART: My name’s Stirling Hart. I’m from Squamish, British Columbia.
KATY MILKMAN: Stirling is one of the top lumberjacks in the world. He was born into it.
STIRLING HART: The lumberjack profession runs in my family. My dad and my grandfather were both loggers. I’d see my dad outside training or working away, and I just wanted to be out there with him, and a passion was basically bred into me from a very, very young age.
KATY MILKMAN: When he’s not working as a lumberjack, he’s competing in lumberjack sports. These are competitions where athletes use axes and saws in events based on logging skills.
STIRLING HART: It originated in the logging camps back in the early 1900s or the late 1800s. When all the cities were being built out here on the coast, they’d live out in these camps for weeks on end. When they get back to camp at night, there wasn’t a lot to do. They get to drinking and bragging about which one of them was actually the best lumberjack, and there was only really one way to settle it.
KATY MILKMAN: Lumberjack sports are now an international phenomenon, and Stirling competes all over the world.
STIRLING HART: There was years I’d spend eight months on the road from Canada, the States, Australia, New Zealand. I’d go on trips over to Europe. I’d go to 11 different countries in six weeks. It was all I did.
KATY MILKMAN: When he wasn’t competing, Stirling was training or performing in a lumberjack show on Grouse Mountain in Vancouver.
STIRLING HART: And it was a 45-minute lumberjack entertainment show, and we would do all of the events three times a day, seven days a week, in a 45-minute show basically.
KATY MILKMAN: The lumberjack show included all of the sports events along with lighthearted displays like log balancing and whimsical woodcarvings, but competitive lumberjack sports are much more intense. Events like the underhand chop, the springboard, the single buck, and the hot saw are dangerous and require incredible skill, speed, and strength. Stirling trained hard to stay in competitive shape even while he was performing in the lumberjack shows.
STIRLING HART: In the mornings, I’d get up, might have like a good breakfast, four or five eggs, some meat patties, and then have a protein shake on my way to the gym. I’d go to the gym for an hour, and then I’d go to the mountain. And it’s about a 45-minute-to-an-hour hike. It’s just three kilometers of stairs.
KATY MILKMAN: That’s about two miles of steep stairs.
STIRLING HART: And I take that on my way to work. Once I’m up there, I do the first show. And in between shows, there’s another peak in the mountain, that’s another 2-, 300 meters higher, and I’d run to the top of that. And then I come back down, do the second show, have lunch, then run to the top. I’d come back down, do the third show, and after that, I’d leave the mountain, go down, and I’d go to the gym at the end of the day. And then I would go home and maybe study some film and look at ways that I could be improving each individual event or whatever event was coming up next. It really consumed my thoughts to be the best in it.
KATY MILKMAN: Stirling had several early career successes, including his first world record as a tree climber in 2010, where he raced up and down a 100-foot tree in 23.3 seconds. He joined Team Canada at the Stihl Timbersports World Championships in 2014, where the team won silver. Then in 2016, he qualified for the Timbersports World Championships in the singles category to compete for the title of Best Lumberjack in the World.
STIRLING HART: So when 2016 came around, I knew in my mind I wanted to win. I wanted to make it back to that world championship stage, so I focused everything I had into my training. I started eating more, lifting heavier. I put on about 10 to 15 pounds. I changed the way I trained. My muscles just needed to be as powerful and explosive as they could be for 15 to 20 seconds. That’s it.
KATY MILKMAN: Stirling was feeling well-prepared for the 2016 world championships in Stuttgart, Germany.
STIRLING HART: I had all my equipment ready. I’d gone around and sourced some of the best equipment in the world. I wanted to win this thing. That’s what I was going there to do. At the time, Jason Wynyard from New Zealand, he had won the world championships nine years in a row, eight years in a row. He had never been even remotely challenged. Going into it, I knew it was a tall order, but I had broken down how the point system worked, how everything worked, and I knew that I had a shot based on my strengths. And so I had a lot of confidence going in. It was in a giant hall, close to 10,000 people, and it was full. And they were rowdy. You come out on stage and there’s smoke and lights, and the crowd is just literally shaking the stage.
And even just being able to control your emotions and have to focus on the competition that day, that’s a feat in itself. Yeah. When you walk out on that stage and every country has their own little fan and cheering section. It’s livestream, so I know my family’s watching back at home. It’s all your hard work and effort that brought you to this point. And now the real work begins. Now you have to try and execute.
KATY MILKMAN: The Stihl Timbersports World Championships is a six-event format. There are three chopping events and three sawing events.
STIRLING HART: So the first event going out was something called the underhand chop, where you have to chop a piece of wood between your feet from both sides.
KATY MILKMAN: The competitors in the underhand chop stand on top of a thick log and rapidly hack away at it with a razor-sharp ax. The blows land just below and between their feet. It’s harrowing to watch because one small error could mean a serious injury.
STIRLING HART: The fastest one through the block is the winner.
KATY MILKMAN: And he won the event.
STIRLING HART: And so that was a decent start for me. It was a new Canadian record. It was my personal best. So yeah, it was good for me. I was happy. And so after the first three events, I think I was sitting in first place. Then you start to panic a little bit because things are going so well, it’s like, don’t screw this up. And then we moved into the springboard event, which is one of my stronger events.
ANNOUNCER: Three, two, one, go.
KATY MILKMAN: The springboard is a wild event where the competitors rapidly hack notches into a pole into which they then jam a wooden board. And then they jump onto the board and proceed to hack another notch into which they place another board. And this goes on until they get to the top where they have to chop through a thick log. It’s amazing to watch.
STIRLING HART: Everything was just clicking that day, so I just was riding the wave. I wasn’t fighting anything. You just, OK, let’s go, and I cut a great race. And then I actually broke the world record in that event. So now I was clearly in the lead going into the last event. So going into this final hot saw event, I had a fairly comfortable lead, but it’s never safe with the way that point system is, and the hot saw has always been a weak event of mine. And so what the hot saw is, is basically you’ve got a chainsaw made out of a dirt bike engine. It’s as exciting as it sounds. You basically just hang on for dear life and everything’s vibrating and the sawdust flying.
And you cut through an 18-inch block of wood three times—one down, one up, one down. The world record in this event is five seconds. I thought, well, everything else today has gone my way. I have had every single lucky bounce, so I’m just going to go for it.
COMMENTATOR: Stirling Hart has to take his chance now.
ANNOUNCER: Hands on the wood. Get set.
COMMENTATOR: Oh no! A false start by Stirling Hart. What a disaster.
STIRLING HART: And I had a malfunction with the saw. So when I went to start the saw, it locked up and didn’t start, and you can hear the entire crowd go, “Aw,” and the air just deflate out of the whole stadium. And in my brain, I’m going, “Uh-oh, that’s not good.” I believe it was my error where I didn’t press a decompression switch, which makes it easier to start the saw. And so at this point, I have to basically go through the starting procedure again while the clock is running to get the saw started. So now it’s been 10 to 15 seconds.
KATY MILKMAN: That one error would cost him any chance at a gold medal, but he could still win silver.
STIRLING HART: So at this point, what I should have done was just started the saw, made three cuts, and taken that silver metal. But my brain was in such a rush in thinking, well, there’s still a chance. So I fired it up. Went as fast as I could.
COMMENTATOR: He rewinds. Starts again to complete the discipline, but that looks pretty bad for Stirling Hart.
KATY MILKMAN: Unfortunately, he went over the six-inch boundary line on his third cut. It was an instant disqualification from the event.
STIRLING HART: Because I disqualified, that bumped me from first down to second, to third, into fourth position, just off the podium.
KATY MILKMAN: He had just missed the podium. One split-second error on the starting of the saw, another split-second error in the cut, and it was all over. He would miss out on the gold, silver, and bronze, ending up in fourth place. It was a crushing defeat.
STIRLING HART: And it was the biggest emotional crash I had ever faced in my life up to this point, going from just riding this way of breaking world records. I broke five out of six. Every single event I competed in that day, I broke the Canadian record in. I just had the best day, and then to have it end on that note and just know that that’s what I’m known for now, and it doesn’t help that people come up, “Oh, it happens to everybody, man.” It’s like, yeah, but it didn’t. It just happened to me right now in front of 10,000 people.
KATY MILKMAN: That immediate and intense disappointment turned into months of questioning what he could have done differently.
STIRLING HART: Well, it was like, what went wrong? How could I have done this? Did I get overconfident? Should I have done more training? I used somebody else’s saw—should I have brought my own? Should I have played it safe right from the beginning? What choice led me to this point? The true weight of the situation, it didn’t really hit me for a while until I realized how close I was to doing something special, not only for myself, but for my country. Canada had never won a world championship or even been on the podium, and I had that chance right in my grasp, and it just slipped away.
And I can vividly remember sitting in the shower of my hotel after the after-party at like 2:00 or 3:00 in the morning, sitting in the shower in my clothes crying. All the emotions just ... After that point, all the hours of ... I can just remember after all the hours of training, all the commitment, the travel, the money spent on equipment, like after everything, one small choice, one small tiny thing, and it was all gone in an instant.
KATY MILKMAN: I want to pause for a minute and have you imagine the same competition, but this time consider what it would have been like if Stirling hadn’t even come close to finishing in the top three. He probably would have been pretty disappointed, but it’s also reasonable to think that he wouldn’t have relived the experience as often or as intensely as he did after coming so close to a medal. You’d probably agree that getting really close to a goal and then losing it seems more painful than missing it by a mile, even though the outcome is the same.
STIRLING HART: It’s a weird emotion, and it takes quite a while to process it. And yeah, I spent a lot of time reflecting about what happened. I know what mechanically happened, but what decisions led me to that point. And what I think it ultimately was was … the thing that got me there was my ambition and my drive. But in the end, that’s what got me. If I had just taken a step back, gone slow, and made what we would call like a safe cut and then wait for the other competitors to screw up, then I would have given myself a shot.
KATY MILKMAN: As painful as this loss was, it wasn’t the end of the story for Stirling. Not even close. With time and reframing of the experience, Stirling managed to leverage the pain of losing in 2016 as motivation to rebound. He went on to win silver at the Stihl World Champions Trophy competition for individuals in 2017, and he won gold at the same competition in 2018.
STIRLING HART: I think back to that stage on 2016 when I lost in that hot saw race. That next year I won nearly every hot saw race wherever we went. You’ve got to kind of take the bumps and bruises. It’s just something that I think every person should learn—how to deal with losing and coping with things that don’t go their way.
KATY MILKMAN: Stirling Hart is a world champion athlete and professional lumberjack. He lives in Squamish, British Columbia, Canada. The audio from Stirling Hart’s performance at the 2016 World Championships was courtesy of Stihl Timbersports. You can find links in the show notes and at schwab.com/podcast.
We’ve all been there. Well, maybe not at a world championship lumberjack competition, but we’ve all been close to a goal and just narrowly missed it. It hurts, and we’ll often stew over what we could have done differently, as if we could somehow change the past when, of course, we can’t. Regret is a powerful emotion that can arise when we reflect on the difference between a hypothetically optimal decision and an actual decision that we’ve made. Stirling Hart spent a great deal of time ruminating on the mistakes he made that cost him a spot on the winner’s podium in 2016. He had intense feelings of “if only”—if only he’d pressed the right button on the chainsaw, if only he’d taken a more conservative approach to his cuts.
Of course, no amount of reflection could change the result, but he did manage to change the future, leveraging that pain he felt into motivation to improve. Interestingly, it’s not just the case that experiencing regret can motivate us to work harder and do better next time—or sometimes wallow in our misery to no good end. It’s also true that merely anticipating the pain of regret can affect how we behave. This is called regret aversion. If you listened to our episode “Spoiled for Choice” with Barry Schwartz, you might remember how regret aversion can affect us when we’re faced with lots of options—say, dozens of jams to choose between or styles of jeans or even wedding venues.
Fear of the regret that we’ll feel if we don’t select the very best option can lead us to abandon making any choice at all. My next guest is Colin Camerer, a behavioral and neuro-economist at Caltech. Colin has done research on the neuroscience behind regret and regret aversion, and he joins me to explain some of the work that sheds light on how regret shapes our decisions for better and worse. Hi, Colin. Thanks so much for being on the show. I appreciate it.
COLIN CAMERER: My pleasure.
KATY MILKMAN: OK. So the first thing I want to ask you is, if you could just define regret for our listeners, what is it?
COLIN CAMERER: So regret is a negative affect, a bad feeling, about having made the wrong choice, looking back. So it’s somebody who took a wild shot and lost the game at the very end. It’s an Olympic medalist who got a silver and not a bronze and is sad that they didn’t get a better medal. And a further element, which is a little bit more disputed scientifically, is whether people don’t do certain things because they expect a certain amount of regret. Like they don’t ask somebody out on a date, or they don’t apply for a hard job because they think if something bad happens, they’ll feel regretful. Regret aversion has to do with the fact that we don’t like feeling regretful, and that may actually prevent us from taking certain kinds of chances.
KATY MILKMAN: Colin, could you describe the scientific evidence for regret and how it affects economic decisions?
COLIN CAMERER: I mean, there’s no question that people feel regret. A bunch of scientific evidence came out in around the ’80s using very simple gambles for money. The Allais paradox is a very famous example, which contributed to Allais’ Nobel Prize. The Allais paradox, part of it was you could have a million dollars for sure or you have a high chance at a million, or you have a 10% chance at five million, but there’s a 1% chance you get nothing.
KATY MILKMAN: Got it. So option two has three possible outcomes and a higher expected payoff with a tiny bit of risk.
COLIN CAMERER: Yes, and people often will take the million because they’re super fearful of choosing the better gamble, where they have a chance at five million, but they might get nothing. And then they get nothing and think, “I regret having not chosen a million dollars instead.” And so a bunch of experiments, really impressive methodical experiments with modest amounts of money and not millions illustrated this type of regret. Then later experiments indicated it was kind of sensitive to how people sort of frame the chance they’d get nothing and whether they knew in advance, like if you choose the million, will you know that if you had chosen a better gamble, you would have gotten zero or not.
And so regret depends a little bit delicately on counterfactuals and whether, if you take a certain action, whether you’d know what else would have happened. Like if you marry one person and not the other, you marry A and not B, do you know what happened to B’s life and how good your life would have been. So regret depends on this kind of counterfactual reasoning.
KATY MILKMAN: Do you have favorite studies? You mentioned that athletes who won silver were less happy than they’d be if they’d won bronze. Why is that?
COLIN CAMERER: One really beautiful example of regret—you can literally see regret in a way on people’s faces—is a study of Olympic medalists. The original study shows pictures of Olympic medalists getting gold, silver, and bronze medals. The pictures are cut off so you can’t see what medal they’re getting, but you can see their faces. So these are people who looked at the faces and they don’t know what the medals were, and they just say, “Is this person happy or not?” And the silver medalists are the least happy. The gold medalists are really happy and exuberant. The bronze medalists are the second most happy, and the silver medalists are the least happy, because the bronze medalists are comparing themselves downward to being fourth.
They’re just happy they got a medal. And the silver medalists can’t help but think, “I wish I had gotten the gold.” And this has been replicated in a much larger dataset and the difference is that the silver and bronze look about the same. But again, you’d think that the better your medal, the bigger your smile, and that’s not the case.
KATY MILKMAN: That’s super interesting. And I know you have a paper about the neural evidence for regret. I’m wondering if you could talk a little bit about that.
COLIN CAMERER: Sure. Yeah. In a collaboration with Cary Frydman, we have been looking at various kinds of regrets and brain signals associated with buying and selling stocks in a kind of artificial stock market. It has to do with what happens when people bought and sold a stock, and they have an opportunity to repurchase it in the future. And the idea is if you bought the stock and sold it, and then it kept going up, people are reluctant to buy it again. If you bought the stock and sold it and then it went down, people are more eager to buy it again.
And what we think is going on is when the stock went up and you kind of got out too soon, and then it keeps going and keeps going, that generates this kind of regret signal, and they don’t want to buy more of a stock that they regret having sold too early. It’s almost like it’s tainted or sort of poisoned, or they feel like, “Gee, I bought it at 10. It went to 20, and now it’s at 30. Why would I buy this dumb thing at 30 that I sold too early?” The stock has kind of a stench or an emotional reaction to it. It’s a pretty small effect, but it’s not particularly rational, especially if you think there’s momentum in stock.
So if the stock was at 10, you sold at 20, and you have a chance to buy at 30, you should be willing to buy rather than hate buying. And we did a similar experiment with artificial stock paths but with actual money, so people could buy and sell and lose and gain money, and we found activity in the ventral medial prefrontal cortical area, which was associated with sort of the strength of the regret. And people who had more brain activity associated with this regret signal were more likely to exhibit a big behavioral effect—that is, an unwillingness to repurchase stocks that they had sold too soon.
And the other thing that was cool, which has not been seen in brain science very much, was that if there’s a stock that they had bought and then sold, like bought at 10, sold at 20, and they don’t own the shares at all, they’re just kind of noticing like they’re looking back at their ex-stock, if the stock goes up, they actually have a negative reaction in ventral striatum. It sort of like it feels bad to know that something you sold too early kept going, even though there are zero financial consequences. There’s no financial consequences at all. It’s a pure signal about having regretted selling too soon.
And these are pretty solid findings, even though it’s just one study, and the fMRI samples are never as large as we would like because it’s expensive, but it fits into a lot of other patterns of how brain signals are encoding very particular, kind of, financial peccadilloes.
KATY MILKMAN: That’s really interesting, and it definitely seems to support this idea that regret affects our decisions.
COLIN CAMERER: Yes. Almost no economists think this way, but as a neuro-economist, my feeling is it’s not real until we see it in the brain, and maybe more aptly, it’s not real until we see it in the New York Stock Exchange, maybe in other different countries, as well as in a carefully controlled experiment and in a brain area that makes sense to us.
KATY MILKMAN: Do you have advice on avoiding mistakes due to regret, either based on science or your own life?
COLIN CAMERER: Yeah. So it’s a very interesting question how would get somebody to avoid regret, and I think it’s related to other character skills like resilience and the ability to recover from setback. One thing is sort of active mental simulation of counterfactual. It’s like you need a cortical override or a sort of deliberative rational override of something which is a very primal kind of highly adapted feeling. So if the stock that you sold too early keeps going up, the rational brain needs to somehow contain the feeling and say, “This is not harming you. This has not harmed you.”
I think that adapting regrets is probably similar to the self-help you needed and the kind of therapeutic, whether it’s an actual therapist helping you or just you’re trying to kind of talk yourself into thinking cleaner and better about your life, about overriding, you know, “Bad things happen. I need to close that account and then move on.”
KATY MILKMAN: I love that mental accounting is a solution. That’s amazing. Have you ever felt in your life that you avoided something because you were anticipating the regret it would cause, and you feel like it was a mistake?
COLIN CAMERER: Probably, and actually evidence from Tom Gilovich is relevant to this question of how has regret affected me and everyday folks. One thing that’s pretty clear is when people look back on their lives, they don’t regret things that they tried and kind of failed, like, “Oh, I got into that car accident, and I wish I hadn’t gone out that night” or “I wish I hadn’t come home so late and was so tired.” They tend to regret inactions. “God, I really wished I’d taken that job even though it was risky” or “I wish I’d moved to that city or tried harder in my marriage” or something like that. I think regret is something in which the wisdom of older people, if it could somehow be like injected into younger people, it might be very useful.
Scientifically, most of our sensory faculties, like hearing and vision, start to fall apart around like age 25. It’s like a steady downhill slip. But I think some of the sense of wisdom and emotional resilience is one thing that kind of goes up as you age. Quite a bit of good decision-making involves immunizing yourself to regret to a sensible degree.
KATY MILKMAN: Colin, thank you so much for joining. This was really interesting.
COLIN CAMERER: It was my pleasure.
KATY MILKMAN: Colin Camerer is the Robert Kirby Professor of Behavioral Finance and Economics at the California Institute of Technology where he teaches cognitive psychology and economics. I’ve posted a link in the show notes and at schwab.com/podcast to his paper “Neural Evidence of Regret and Its Implications for Investor Behavior.”
The question of whether to sell a stock, which was central to some of the research Colin just described, is one that causes investors a lot of angst and indecision. And it was actually the topic of the very first episode of our sister podcast, Financial Decoder. On Financial Decoder, host Mark Riepe and his guests share strategies for approaching financial decisions armed with information and on guard against the biases that might derail you. You can find it at schwab.com/financialdecoder or wherever you get your podcasts.
Regret is a really interesting emotion. Even though we regret actions we took or didn’t take in the past, that regret can change our decisions about the future. And sometimes regretting poor choices can help us learn and improve. Imagine a kid who makes a bad decision. They stay up late watching TV instead of studying for a test, earn an F, and then get grounded. Regret may teach them to do better next time. They may feel so much regret that they’ll wise up, study more, and goof off less before their next test. That’s productive regret. But we’ve all experienced counterproductive regrets too—regrets that we can’t learn from easily because the mistake really wasn’t a mistake at all, or because we won’t have a redo.
There won’t be another test. In our episode titled “No Harm, No Foul,” transplant surgeons faced intense regret around low patient survival rates, but they were working with the best medical science available at the time. I’d bargain that most of you have a counterproductive regret or two surrounding the coronavirus pandemic. Maybe you canceled an annual physical or plans with friends or family right before the pandemic hit and then were unable to reschedule when your state shut down. That isn’t a productive regret because there’s nothing to be learned. You couldn’t have anticipated the impending disaster. It’s just a nagging, unpleasant feeling you’re stuck with that made you worse off net-net.
That down-in-the-dumps feeling can spark regret aversion in the future, which might prevent you from seizing opportunities or making a choice when you have lots of attractive options in front of you. A key contributor to regret, naturally, is finding out what would have happened if only you’d made a different decision. One piece of advice is not to go hunting for useless counterfactuals, the kind you wouldn’t be able to learn from. If you sold a stock, why check whether it’s gone up since? If it has, what would you do with that information anyway? Finding out it’s gone down might make you feel good, but since losses loom larger than gains, your bad feelings if the stock has gone up are likely to be stronger.
And the market tends to go up, after all, over the long-term. But I’d flip that advice in cases where you can learn from a counterfactual. Ideally, when searching for what happened after you made a choice, you should make a plan for how you’ll use that information to improve next time—maybe training harder like Stirling Hart or thinking about how to make critical split-second decisions differently. If you are preparing to face a counterfactual that’s unlikely to spark learning and you just can’t dodge it, you should also consider Colin Camerer’s advice to use mental accounting.
What can you do to firmly relegate regrets to the past and convince yourself you’re turning over a new leaf? In a past episode about mental accounting and the fresh-start effect, I described research showing that dates like Monday and New Year’s can help us create a psychological barrier between the past and the present, giving us renewed optimism about the future by providing a sense that failures are really behind us. To leave unproductive regrets behind, it may be helpful to look for fresh starts so you can cut yourself some slack.
You’ve been listening to Choiceology, an original podcast from Charles Schwab. If you’ve enjoyed the show, we’d be really grateful if you’d leave us a review on Apple Podcasts. You can also subscribe for free in your favorite podcasting apps. And if you’d like to get my newsletter to learn more about behavioral science, you can sign up at KatyMilkman.com/newsletter. That’s it for this season of Choiceology. If you’re new to the show, we’ve got a big back-catalog of episodes to enjoy. We’ll be back with new stories and fantastic guests in early 2021. I’m Dr. Katy Milkman. Talk to you soon.
SPEAKER 8: For important disclosures, see the show notes or visit schwab.com/podcast.