Thinking About Values in Prospect and Retrospect: Maximizing Experienced Utility

Decision-makers often do not or cannot predict at the time of choice howtheir tastes may change by the time the outcomes are experienced. This paperexplores the implications of making decisions by maximizing experiencedutility ex post rather than ex ante. Focusing on being satisfied with choicein retrospect results in quite different kinds of problems than aprospective orientation that projects one's current preferences into thefuture. We examine a number of ways that people can easily mistake theirreactions to outcomes in the future, and propose a series of hypothesesrelated to how people will be dissatisfied with their choices. Finally, werelate these barriers to good decisions to prescriptive processes thatassist people in making decisions with which they will be happy in thefuture.

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