Huang R.J.Muermann A.Tzeng L.Y.2019-07-222019-07-2220141554964Xhttps://scholars.lib.ntu.edu.tw/handle/123456789/414424We analyse the welfare effect of governmental regulation for individuals who consider anticipated regret in their decision-making process. Although governmental policies by directing choice, distort individual decisions in the private market, they can alleviate individuals' pain associated with the feeling of regret. We analyse this trade-off and provide conditions under which the implied reduction of regret justifies regulation. Furthermore, we demonstrate our findings on tax deduction for non-insured losses, a well-studied social policy in insurance. Last, we consider heterogenous individuals and alternative social welfare functions and show that our results hold in these extended settings. ? 2014 The International Association for the Study of Insurance Economics.insurance demandregretregulationtax deductionjournal article10.1057/grir.2013.4https://www.scopus.com/inward/record.uri?eid=2-s2.0-84903164090&doi=10.1057%2fgrir.2013.4&partnerID=40&md5=e1f8a4b0a875237d2044f66bc5a215922-s2.0-84903164090https://www.scopus.com/inward/record.uri?eid=2-s2.0-84903164090&doi=10.1057%2fgrir.2013.4&partnerID=40&md5=e1f8a4b0a875237d2044f66bc5a21592