In the hopes of finding supporting evidence for various accounts of actual causation, many philosophers have recently turned to psychological findings about the influence of norms on counterfactual cognition. Surprisingly little philosophical attention has been paid, however, to the question of why considerations of normality should be relevant to counterfactual cognition to begin with. In this paper, I follow two aims. First, against the methodology of two prominent psychological accounts, I argue for a functional approach to understanding the selectivity of (...) counterfactual cognition. Second, I take some steps towards a systematic analysis by providing a qualitative, decision‐theoretic account of one important function of counterfactual thinking, namely, inferring, in the face of undesirable outcomes, corrective policies that prevent the occurrence of similar outcomes in future circumstances. I make a case for employing this analysis by (a) showing its value for assessing the rationality of imagination‐driven counterfactual generation, (b) highlighting its use for making sense of practices in history and policy analysis where counterfactual selection plays a central role, and (c) demonstrating its diagnostic value for identifying areas where counterfactual generation may lead us into epistemic and ethical troubles. (shrink)