Alex Markle, George Wu, Rebecca J. White, and Aaron M. Sackett, “Goals as Reference Points in Marathon Running: A Novel Test of Reference Dependence.” Fordham University Schools of Business Research Paper No. 2523510, November 12, 2014 [subsequently updated].
• Marathoners are asked for a time goal prior to the race; the notion is that these goals serve as reference points through which prospect theory-style preferences pivot.
• Runners also are asked to indicate how happy they will be with meeting their time goal, or with beating it, or with not meeting it. Answers to these questions suggest that runners believe that their experience utility will display loss aversion, with the time goal as reference point.
• Actual satisfaction with marathon performance indeed tracks performance relative to the time goal with loss aversion and diminishing sensitivity. People overestimate their degree of loss aversion (or their benefit from success), but nevertheless they do experience some aversion (or benefit).
• Unlike the standard prospect theory gain-loss function, the satisfaction experienced by runners takes a jump discontinuity at the reference point.
• Runners who indicated that their time goal was particularly important seem to display larger loss aversion.
• The existence of additional reference points, such as past best time or most recent marathon time, also can mediate results.
• Note that reference-dependent preferences might be “rational” if, as here, actual experienced utility displays reference dependence.
• Marathoners are overly optimistic about their chances of meeting their time goal.
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