lynx   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/sae/jospec/v22y2021i7p777-798.html
   My bibliography  Save this article

When Falling Just Short is a Good Thing: The Effect of Past Performance on Improvement

Author

Listed:
  • Mariya Burdina
  • Scott Hiller
Abstract
Models of reference-dependent preferences show that an individual’s utility depends on the difference between the outcome and a “neutral†reference point. Our paper investigates how distance from reference points affects future performance. We find that round numbers and personal bests motivate runners and that missing the goal by a small amount improves future performance. For those who achieve their goal, future performance suffers slightly. In empirical analysis, we use an extensive panel of marathon data, which contains a past running history for every runner in our sample and allows us to estimate runners’ ability and experience.

Suggested Citation

  • Mariya Burdina & Scott Hiller, 2021. "When Falling Just Short is a Good Thing: The Effect of Past Performance on Improvement," Journal of Sports Economics, , vol. 22(7), pages 777-798, October.
    • Handle: RePEc:sae:jospec:v:22:y:2021:i:7:p:777-798
    DOI: 10.1177/15270025211018247
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/15270025211018247
    Download Restriction: no
    File URL: https://libkey.io/10.1177/15270025211018247?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Colin Camerer & Linda Babcock & George Loewenstein & Richard Thaler, 1997. "Labor Supply of New York City Cabdrivers: One Day at a Time," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 407-441.
    2. Vincent P. Crawford & Juanjuan Meng, 2011. "New York City Cab Drivers' Labor Supply Revisited: Reference-Dependent Preferences with Rational-Expectations Targets for Hours and Income," American Economic Review, American Economic Association, vol. 101(5), pages 1912-1932, August.
    3. Botond Kőszegi & Matthew Rabin, 2006. "A Model of Reference-Dependent Preferences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(4), pages 1133-1165.
    4. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
    5. Amos Tversky & Daniel Kahneman, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 1039-1061.
    6. repec:bla:jfinan:v:53:y:1998:i:5:p:1775-1798 is not listed on IDEAS
    7. David Card & Alexandre Mas & Enrico Moretti & Emmanuel Saez, 2012. "Inequality at Work: The Effect of Peer Salaries on Job Satisfaction," American Economic Review, American Economic Association, vol. 102(6), pages 2981-3003, October.
    8. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    9. Brad M. Barber & Yi‐Tsung Lee & Yu‐Jane Liu & Terrance Odean, 2007. "Is the Aggregate Investor Reluctant to Realise Losses? Evidence from Taiwan," European Financial Management, European Financial Management Association, vol. 13(3), pages 423-447, June.
    10. Botond Koszegi & Matthew Rabin, 2007. "Reference-Dependent Risk Attitudes," American Economic Review, American Economic Association, vol. 97(4), pages 1047-1073, September.
    11. Baker, Malcolm & Pan, Xin & Wurgler, Jeffrey, 2012. "The effect of reference point prices on mergers and acquisitions," Journal of Financial Economics, Elsevier, vol. 106(1), pages 49-71.
    12. Alex Markle & George Wu & Rebecca White & Aaron Sackett, 2018. "Goals as reference points in marathon running: A novel test of reference dependence," Journal of Risk and Uncertainty, Springer, vol. 56(1), pages 19-50, February.
    13. Ernst Fehr & Lorenz Goette, 2007. "Do Workers Work More if Wages Are High? Evidence from a Randomized Field Experiment," American Economic Review, American Economic Association, vol. 97(1), pages 298-317, March.
    14. Grant, Darren, 2016. "The essential economics of threshold-based incentives: Theory, estimation, and evidence from the Western States 100," Journal of Economic Behavior & Organization, Elsevier, vol. 130(C), pages 180-197.
    15. Botond Koszegi & Matthew Rabin, 2009. "Reference-Dependent Consumption Plans," American Economic Review, American Economic Association, vol. 99(3), pages 909-936, June.
    16. Eric J. Allen & Patricia M. Dechow & Devin G. Pope & George Wu, 2017. "Reference-Dependent Preferences: Evidence from Marathon Runners," Management Science, INFORMS, vol. 63(6), pages 1657-1672, June.
    17. Burdina, Mariya & Hiller, R. Scott & Metz, Neil E., 2017. "Goal attainability and performance: Evidence from Boston marathon qualifying standards," Journal of Economic Psychology, Elsevier, vol. 58(C), pages 77-88.
    18. Nicholas C. Barberis, 2013. "Thirty Years of Prospect Theory in Economics: A Review and Assessment," Journal of Economic Perspectives, American Economic Association, vol. 27(1), pages 173-196, Winter.
    19. Boles, Terry L. & Messick, David M., 1995. "A Reverse Outcome Bias: The Influence of Multiple Reference Points on the Evaluation of Outcomes and Decisions," Organizational Behavior and Human Decision Processes, Elsevier, vol. 61(3), pages 262-275, March.
    20. Kahneman, Daniel, 1992. "Reference points, anchors, norms, and mixed feelings," Organizational Behavior and Human Decision Processes, Elsevier, vol. 51(2), pages 296-312, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alex Markle & George Wu & Rebecca White & Aaron Sackett, 2018. "Goals as reference points in marathon running: A novel test of reference dependence," Journal of Risk and Uncertainty, Springer, vol. 56(1), pages 19-50, February.
    2. Eric J. Allen & Patricia M. Dechow & Devin G. Pope & George Wu, 2017. "Reference-Dependent Preferences: Evidence from Marathon Runners," Management Science, INFORMS, vol. 63(6), pages 1657-1672, June.
    3. Aurélien Baillon & Han Bleichrodt & Vitalie Spinu, 2020. "Searching for the Reference Point," Management Science, INFORMS, vol. 66(1), pages 93-112, January.
    4. Zhihua Li & Songfa Zhong, 2023. "Reference Dependence in Intertemporal Preference," Management Science, INFORMS, vol. 69(1), pages 475-490, January.
    5. Vincent P. Crawford & Juanjuan Meng, 2011. "New York City Cab Drivers' Labor Supply Revisited: Reference-Dependent Preferences with Rational-Expectations Targets for Hours and Income," American Economic Review, American Economic Association, vol. 101(5), pages 1912-1932, August.
    6. Adhvaryu, Achyuta & Nyshadham, Anant & Xu, Huayu, 2023. "Hostel takeover: Living conditions, reference dependence, and the well-being of migrant workers," Journal of Public Economics, Elsevier, vol. 226(C).
    7. Committee, Nobel Prize, 2017. "Richard H. Thaler: Integrating Economics with Psychology," Nobel Prize in Economics documents 2017-1, Nobel Prize Committee.
    8. Karle, Heiko & Schumacher, Heiner & Vølund, Rune, 2023. "Consumer loss aversion and scale-dependent psychological switching costs," Games and Economic Behavior, Elsevier, vol. 138(C), pages 214-237.
    9. Carpentier, A. & Reboud, X., 2018. "Why farmers consider pesticides the ultimate in crop protection: economic and behavioral insights," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277528, International Association of Agricultural Economists.
    10. Heiko Karle & Heiner Schumacher & Rune Vølund, 2020. "Consumer search and the uncertainty effect," Working Papers of Department of Economics, Leuven 657766, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    11. Lü, Yiqing & Zhao, Bin & Zhu, Ning, 2024. "Unveiling investors' substitution behavior: Stock trading decisions in response to housing market dynamics," Journal of Corporate Finance, Elsevier, vol. 86(C).
    12. Wenhui Zhou & Dongmei Wang & Weixiang Huang & Pengfei Guo, 2021. "To Pool or Not to Pool? The Effect of Loss Aversion on Queue Configurations," Production and Operations Management, Production and Operations Management Society, vol. 30(11), pages 4258-4272, November.
    13. Axel Ockenfels & Dirk Sliwka & Peter Werner, 2015. "Bonus Payments and Reference Point Violations," Management Science, INFORMS, vol. 61(7), pages 1496-1513, July.
    14. Park, Hyeon, 2023. "A general equilibrium model of dynamic loss aversion," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 107(C).
    15. Koch, Alexander K. & Nafziger, Julia, 2016. "Goals and bracketing under mental accounting," Journal of Economic Theory, Elsevier, vol. 162(C), pages 305-351.
    16. Doerrenberg, Philipp & Duncan, Denvil & Löffler, Max, 2023. "Asymmetric labor-supply responses to wage changes: Experimental evidence from an online labor market," Labour Economics, Elsevier, vol. 81(C).
    17. Kohei Daido & Takeshi Murooka, 2016. "Team Incentives and Reference‐Dependent Preferences," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 25(4), pages 958-989, December.
    18. Daniel Reck & Arthur Seibold, 2022. "The Welfare Economics of Reference Dependence," CESifo Working Paper Series 9999, CESifo.
    19. Quang Nguyen, 2011. "Does nurture matter: Theory and experimental investigation on the effect of working environment on risk and time preferences," Journal of Risk and Uncertainty, Springer, vol. 43(3), pages 245-270, December.
    20. Luc Meunier & Sima Ohadi, 2023. "When are two portfolios better than one? A prospect theory approach," Theory and Decision, Springer, vol. 94(3), pages 503-538, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:jospec:v:22:y:2021:i:7:p:777-798. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.
    Лучший частный хостинг