Counterfactual thinking is a term of psychology that describes the tendency people have to imagine alternatives to reality. Humans are predisposed to think about how things could have turned out differently if only…, and also to imagine what if?. Counterfactuals are conditional propositions, containing an antecedent and a consequence (e.g., If Matt had run, he would have caught the bus.)
Types of counterfactual thinking are directionality, additive/subtractive, self vs other. Theories of counterfactual thinking are norm theory, functional theory and rational imagination theory.
Kahneman and Miller (1986) proposed the norm theory as a theoretical basis to describe the rationale for counterfactual thoughts. Norms involve a pairwise comparison between a cognitive standard and an experiential outcome. A discrepancy elicits an affective response which is influenced by the magnitude and direction of the difference (Roese & Olson, 1995). For example, if a server makes twenty dollars more than a standard night, a positive affect will be evoked. If a student earns a lower grade than is typical, a negative affect will be evoked. Generally, upward counterfactuals are likely to result in a negative mood, while downward counterfactuals elicit positive moods (Markman et al., 1993).
Byrne (2005) outlined a set of cognitive principles that guide the possibilities that people think about when they imagine an alternative to reality. Experiments show that people tend to think about true possibilities, rather than false possibilities, and they tend to think about few possibilities rather than many. Counterfactuals are special in part because they require people to think about at least two possibilities (reality, and an alternative to reality), and to think about a possibility that is false, temporarily assumed to be true.
The functional theory looks at how counterfactual thinking and its cognitive processes benefit people. Counterfactuals serve a preparative function, and help people avoid past blunders (Walker & Smith, 2002). Counterfactual thinking also serves the affective function to make a person feel better. By comparing one’s present outcome to a less desirable outcome, the person may feel better about the current situation (1995). For example, a disappointed runner who did not win a race may feel better by saying, “At least I did not come in last.”