Multiple Goals as Reference Points: One Failure Makes Everything Else Feel Worse

Abstract

It is well known that goals serve as reference points, and their influence on pleasure can be understood with prospect theory’s value function. We examine how people feel about their progress on two goals (i.e., academics and fitness). What happens when they achieve one goal but fail to reach another? In four studies, we test the assumptions needed to explain hedonic reactions to progress along two goals. Loss aversion and diminishing sensitivity hold on each variable separately. However, we find violations of additivity in the integration of the emotions about outcomes. A success in one goal and a failure in another feel worse than the sum of the pleasure and pain associated with the gain and loss, respectively. The online appendix and data files are available at https://doi.org/10.1287/mnsc.2018.3097 . This paper was accepted by Elke Weber, judgment and decision making.