Goals as reference points

We argue that goals serve as reference points and alter outcomes in a manne r consistent with the value function of Prospect Theory (Kahneman & Tversky , 1979; Tversky & Kahneman, 1992). We present new evidence that goals inher it the proper ties of the value function-not only a reference point, but al so loss aversion and diminishing sensitivity. We also use the value functio n to explain previous empirical results in the goal literature on affect, e ffort, persistence, and performance. (C) 1999 Academic Press.