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When people receive a negative outcome such as a loss from their stock investment, or poor pedagogy of a course, or failure of the purchased product, one of the emotions they feel is regret. Regret is the emotion that accompanies self-referent counterfactual thoughts that one could have done something to receive a real or imaginary superior foregone outcome (Zeelenberg & Pieters, 2007). Researchers have conducted many studies investigating the effect of action (making a choice to switch away to a course resulting in a negative outcome) versus inaction (declining to switch away from the same course resulting in a negative outcome) on regret (Kahneman & Tverskey, 1982). Results of these studies suggested that individuals’ tend to perceive a decision to be worse—and experience more regret—when the outcome results from action as opposed to inaction. Based on the results of the aforementioned studies, it is suggested that action decision is associated with choosing a course and is similar to personal agency, whereas inaction decision is not (Zeelenberg et al., 1998b, page 268). Regret literature also suggests that responsibility for choosing a course of action is associated with greater regret because an individual who is personally responsible for choosing the course of action that led to the negative outcome perceives the self as the cause of the outcome (self-blame or self-agency) and generates more self-referent counterfactual thinking. In this study, we manipulate decision agency at two levels; action (i.e. switching a course), and inaction (i.e. choosing not to switch and maintain the current course) to juxtapose the effects of justification of the decision, self-referent counterfactual thinking and self-agency on regret. We also manipulate information about foregone option (Known versus Unknown) to investigate its effect on regret as well as the effects of action versus inaction decisions on regret when explicit counterfactual information is available versus not available. We highlight the findings from the escalation of commitment literature, which documents that upon receiving an interim negative outcome, individuals responsible for choosing an option either from action or inaction are likely to justify their decisions to reduce cognitive dissonance (Staw, 1976). Furthermore, we highlight self-serving bias literature (Campbell & Sedikides, 1999; Weiner, 1985) to suggest that when individuals self-report their emotions, they are more likely to attribute positive outcome to themselves and less likely to attribute negative outcome to themselves to self-blame for causing the outcome. Therefore, self-agency may not be the prime antecedent of individual’s regret. Instead, we argue that justification of the decision should reduce regret whereas self-referent counterfactual thinking should amplify the emotion and explain higher portion of variance of regret.