Goals as Reference Points in Marathon Running: A Novel Test of Reference Dependence

32 Pages Posted: 14 Nov 2014 Last revised: 9 Apr 2015

See all articles by Alex Markle

Alex Markle

Fordham University - Gabelli School of Business

George Wu

University of Chicago - Booth School of Business

Rebecca J. White

University of Chicago - Center for Decision Research

Aaron M. Sackett

University of St. Thomas

Date Written: April 8, 2015

Abstract

Although many empirical investigations have documented reference-dependent preferences, most studies of reference dependence have considered only status quo reference points. In a large-scale field study of marathon runners, we test whether goals, a non-status quo reference point, act similarly to status quo reference points. We find that satisfaction as a function of relative performance (the difference between a runner's time goal and her finishing time) exhibits loss aversion and diminishing sensitivity, consistent with the Prospect Theory value function. Unlike the Prospect Theory value function, however, we also find a discontinuity (or jump) at the reference point. We further find that loss aversion is moderated by goal importance, that multiple reference points simultaneously impact runner satisfaction, and that loss aversion is overestimated in predictions of satisfaction, but still present in actual experienced satisfaction.

Keywords: reference dependence, Prospect Theory, loss aversion, goals, effort provision, satisfaction

Suggested Citation

Markle, Alex and Wu, George and White, Rebecca J. and Sackett, Aaron M., Goals as Reference Points in Marathon Running: A Novel Test of Reference Dependence (April 8, 2015). Fordham University Schools of Business Research Paper No. 2523510, Available at SSRN: https://ssrn.com/abstract=2523510 or http://dx.doi.org/10.2139/ssrn.2523510

Alex Markle (Contact Author)

Fordham University - Gabelli School of Business ( email )

113 West 60th Street
Bronx, NY 10458
United States

George Wu

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

Rebecca J. White

University of Chicago - Center for Decision Research ( email )

5807 South Woodlawn Avenue
Chicago, IL 60637
United States

Aaron M. Sackett

University of St. Thomas ( email )

2115 Summit Avenue
Mail MCH 316
Saint Paul, MN 55105
United States

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