This article considers two recent lines of research concerned with the construction of imagined or simulated
events that can provide insight into the relationship between memory and decision making.
One line of research concerns episodic future thinking, which involves simulating episodes that might
occur in one’s personal future, and the other concerns episodic counterfactual thinking, which involves
simulating episodes that could have happened in one’s personal past. We first review neuroimaging studies
that have examined the neural underpinnings of episodic future thinking and episodic counterfactual
thinking. We argue that these studies have revealed that the two forms of episodic simulation engage a
common core network including medial parietal, prefrontal, and temporal regions that also supports episodic
memory. We also note that neuroimaging studies have documented neural differences between
episodic future thinking and episodic counterfactual thinking, including differences in hippocampal
responses. We next consider behavioral studies that have delineated both similarities and differences
between the two kinds of episodic simulation. The evidence indicates that episodic future and counterfactual
thinking are characterized by similarly reduced levels of specific detail compared with episodic
memory, but that the effects of repeatedly imagining a possible experience have sharply contrasting
effects on the perceived plausibility of those events during episodic future thinking versus episodic counterfactual
thinking. Finally, we conclude by discussing the functional consequences of future and counterfactual
simulations for decisions.