Counterfactual thought describes the process of thinking about alternatives to reality. Counterfactual thought can result in various counterfactual emotions, one of which - regret- has received particular research attention. Regret is the emotion we feel when things would have turned out better than they are now, if only we had acted differently in some way. Thus, regret involves a comparison between reality and a counterfactual alternative. Functional theories of regret argue that experiencing or anticipating regret can promote adaptive behavior, as aversive emotional feedback signals that a sub-optimal decision has been made. Furthermore, thinking counterfactually about how poor outcomes could have been avoided also draws attention to ameliorative actions, which can then be enacted upon when faced with similar decisions in the future. Indeed, many studies have evidenced that experiencing or anticipating regret can promote adaptive behavior, in both adults and children. However, studies of regret have focused primarily on the context of self-interested decision making, i.e. when an individual makes a decision which results in a poor outcome for themselves. I refer to this as intrapersonal regret. However, it is also possible to experience regret about decision that have negative consequences for someone other than ourselves: I call this interpersonal regret. The primary aim of this thesis was to investigate the development of interpersonal regret. Motivating this aim was the suggestion that, if intrapersonal regret informs self-interested decision making process, perhaps interpersonal regret might inform social and moral decision making. In Studies 1 through 3, I describe efforts to design an interpersonal regret task which could overcome some limitations which had been identified in existing regret tasks, while maintaining a similar structure overall. In Studies 1 and 2, 8-9-year-olds reported feeling sadder when they learned that making a different choice would have prevented the poor outcome of a peer, and did so significantly more often in regret trials than control trials (where making a different choice would not have prevented the poor outcome). Additionally, 8-9-year-olds reported feeling sadder significantly more often than 4-5-year-olds in regret trials, as is consistent with developmental changes in counterfactual thinking abilities. However, while this evidence suggested that sadder responses were underpinned by consideration of the counterfactual alternative - what would have happened if they had made a different choice - it was not until Study 3 that 8-9-year-olds reported feeling sadder in such circumstances significantly more often than chance. Having piloted and refined the interpersonal regret measure, its associations with theoretically relevant constructs were examined in Study 4; resource donation and sympathy. In addition to examining interpersonal regret, this thesis also investigated prosocial risk taking (PSRT). PSRT was defined as taking a risk with the primary intention of benefitting a person other than oneself. Importantly, PSRT required a potential cost to one's own outcomes, making it more likely that the intentions underlying such a choice were genuinely altruistic. Few 8-9-year-olds were willing to take a prosocial risk to benefit a peer; those who were did so consistently across trials and were more likely to experience interpersonal regret. Engaging in PSRT was also associated with donating a larger amount of resources to another child, and paying a cost to create equality with another child. These findings indicated our tasks had successfully operationalized a novel indicator of prosociality. Although recent work has discussed PSRT as a theoretical construct, we are the first to propose a measure of PSRT, and to examine its occurrence in children.