Making Causal Judgment

The importance of counterfactual reasoning.

Posted Nov 21, 2017

In everyday life, we encounter situations that seem to demand an explanation of why something happened, how it happened, or how it could have been prevented. People have a scientist-like desire in identifying the general causes of an outcome. Causal explanations can help us understand why events change course (e.g., an accident, divorce, a rejection). Our interest in causation is motivated by our deep-seated desire to influence or control the world we live in (Sloman, 2009).

Causation can be defined as the act of causing something to happen. A cause is something that produces an effect. In causal reasoning, we focus on how an event actually occurred (e.g., a man ran the red light, slamming into another car). Causal thinking plays a key role in the explanation process and blame assignment.

For example, a student might receive a failing grade on an exam, which represents a gap between current performance and the desired performance (e.g., getting a grade of A). The student might think, “If only I had studied harder, I would have got an A.” This is essentially a causal statement linking the action of studying to the goal of achieving the desired grade.

People also have a unique ability to imagine alternatives to reality. They reflect on the things that might have happened differently (Mandel, et al., 2005). Such thoughts are called counterfactual (i.e., counter-to-fact) thoughts. Counterfactual thinking refers to the comparison of reality to hypothetical alternatives (“what if I had chosen differently”). People create counterfactual alternatives to reality when they imagine how things would have turned out differently.

Counterfactual affect the way we feel about events (Byrne, 2005). Upward counterfactual comparisons (contemplating of better possible worlds) help people learn and better prepare for the future. In the case of the student who failed to achieve an A, an upward contrast should encourage the student to devise strategies to achieve a favorable outcome (e.g., putting more time into school work). But the comparison makes them feel bad in the process by pointing to ways that things could have been better. Downward counterfactual comparisons (how it could have gone worse) make people feel good by showing them how bad it could have been but don’t teach them very much.

Indeed, the experience of good or bad luck depends on considering the alternative. People use “luck” (or “fortunate”) in comparison with worse counterfactuals (“it is lucky that you have a job”). For example, bronze medalists, on average, tend to be happier when receiving their medals than silver medalists (Medvec et al., 1995). A near loser is lucky. But a near winner is unlucky. 

A grateful person realizes that the advantages he or she enjoys could have been nonexistent that cannot be taken for granted. On the other hand, envious people compare themselves to somebody better off, thinking: “it could have been me.” So envy implies an upward counterfactual comparison.

Counterfactual thinking can also be dysfunctional (Howlett and Paulu, 2013). Regret arises as an after-the-fact emotion when a different choice would have produced a better outcome. Regret stem from a comparison between “what is” and “what could have been.” Counterfactual thinking has been linked to rumination, a negative and repetitive thought process, about what might have gone better, resulting in negative affect. Ruminative counterfactual thinking is an important risk factor for depressive symptoms.

Regret varies with age and the differences in perceived control. Younger adults tend to experience more personal regret than do older adults. This difference in the experience of regret over the life course is possibly related to the general decline in control over one’s life that comes with age. Being able to let go of failed goals promotes happiness (Howlett and Paulu, 2013). This is one of the benefits of aging.

In sum, causal and counterfactual reasoning inform our judgments of causality. Counterfactuals represent awareness of alternative possibilities. We often engage in counterfactual thoughts as a means of understanding how we come to this point in life (“if he had worn his seatbelt he would not have been injured”). People can exercise some control over whether they imagine better worlds (upward comparison) or worse worlds. Better-world comparisons can help people to prepare for the future at the expense of feeling bad. The downward comparisons can help people feel better. But they can encourage complacency.    


Byrne, R. M. J. (2005) The rational imagination: How people create alternatives to reality. MIT Press.

Howlett JR and Paulus MP (2013). Decision-Making Dysfunctions of Counterfactuals in Depression: Who Might I have Been? Front Psychiatry; 4: 143.

Mandel, D. R., Hilton, D. J., & Catellani, P. (2005). The psychology of counterfactual thinking. New York, NY: Routledge.

Medvec, V.H., Madey, S.F., & Gilovich, T. (1995). When less is more: Counterfactual thinking and satisfaction among Olympic medalists. Journal of Personality and Social Psychology, 69, 603-610.

Sloman, S. A. (2009). Causal Models: How People Think About the World and its Alternatives. Oxford: Oxford University Press.