Goals as Reference Points
Abstract
We argue that goals serve as reference points and alter outcomes in a manner consistent with the value function of Prospect Theory (Kahneman & Tversky, 1979; Tversky & Kahneman, 1992). We present new evidence that goals inherit the properties of the value function-not only a reference point, but also loss aversion and diminishing sensitivity. We also use the value function to explain previous empirical results in the goal literature on affect, effort, persistence, and performance.
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Heath, Larrick, and Wu (1999) propose that as a result of the diminishing sensitivity of prospect theory's value function, people should exert more effort as they near their (self-imposed) goals.
“Heath, Larrick, and Wu (1999) propose that as a result of the diminishing sensitivity of prospect theory's value function, people should exert more effort as they near their (self-imposed) goals.”
From The Goal-Gradient Hypothesis Resurrected: Purchase Acceleration, Illusionary Goal Progress, and Customer Retention (2006) · cites this paper as Heath, Larrick, and Wu 1999
Encountering failure during goal pursuit triggers feelings of discouragement and undermines belief in one's ability to ultimately reach that goal.
“Encountering failure during goal pursuit triggers feelings of discouragement (Heath, Larrick and Wu 1999) and undermines belief in one's ability to ultimately reach that goal (Bandura and Locke 2003; Latham and Locke 2006).”
From On or Off Track: How (Broken) Streaks Affect Consumer Decisions (2023) · cites this paper as Heath, Larrick and Wu 1999
Cites
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“But how much more sensitive? Studies of risky choice (Tversky & Kahneman, 1992) and riskless choice (Tversky & Kahneman, 1991; Kahneman, Knetsch, & Thaler, 1990 ) have presented converging evidence that losses are weighted approximately two times more than equivalent gains (the most common values for this ‘‘coefficien…”
BackgroundDownward comparison principles in social psychology
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“Like goals, ‘‘upward’’ comparisons provide the motivation and opportunity to improve one’s circumstance (Collins, 1996; Taylor & Lobel, 1989; Larrick et al., 1998), whereas downward comparisons satisfy the desire to protect and enhance self-esteem (Taylor & Lobel, 1989; Tesser, 1988; Wills, 1981).”
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Immediate rewards predict adherence to long-term goals
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Artinger, F. M., Gigerenzer, G., & Jacobs, P. (2022) · Journal of Economic Literature · doi:10.1257/jel.20201396 · Cited by 90 · see citing works
The burden of social proof: Shared thresholds and social influence
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Kramer, J.-N., Künzler, F., Mishra, V., Presset, B., Kotz, D., Smith, S., Scholz, U., & Kowatsch, T. (2019) · JMIR Research Protocols · doi:10.2196/11540 · Cited by 74 · see citing works
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Silverman, J., & Barasch, A. (2023) · Journal of Consumer Research · doi:10.1093/jcr/ucac029 · Cited by 34 · see citing works
Shealy, T., Klotz, L., Weber, E. U., Johnson, E. J., & Bell, R. G. (2019) · Journal of Management in Engineering · doi:10.1061/(asce)me.1943-5479.0000692 · Cited by 11 · see citing works
- Authors
- Heath, C., Larrick, R. P., & Wu, G.
- Affiliations
- Duke University (US)
- University of Chicago (US)
- Venue
- Cognitive Psychology
- Publisher
- Elsevier BV
- Published
- 1999-02
- Volume
- 38
- Issue
- 1
- Pages
- 79-109
- ISSN
- 0010-0285 (ISSN-L)
- OpenAlex
- W2160010213
- Cited by
- 1,009
- References
- 11
- Citations by year
- 2026: 30 · 2025: 27 · 2024: 47 · 2023: 47 · 2022: 39 · 2021: 54 · 2020: 53 · 2019: 53 · 2018: 62 · 2017: 48 · 2016: 58 · 2015: 63 · 2014: 60 · 2013: 39 · 2012: 33
- FWCI
- 12.11
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- Cognitive Psychology (publishedVersion)
- PubMed (publishedVersion)
- Topics
- Social Sciences › Decision Sciences › General Decision Sciences › Decision-Making and Behavioral Economics
- Social Sciences › Psychology › Applied Psychology › Behavioral Health and Interventions
- Social Sciences › Psychology › Experimental and Cognitive Psychology › Education, Achievement, and Giftedness
- Keywords
- goals, reference points, prospect theory, value function, loss aversion, diminishing sensitivity, goal setting, affect, effort, persistence, performance
- MeSH terms
- Cognition, Goals, Humans, Motivation
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