Reference-Dependent Preferences: Evidence from Marathon Runners

Eric J. Allen, Patricia M. Dechow, Devin G. Pope, George Wu

NBER Working Paper No. 20343
Issued in July 2014
NBER Program(s):   LS   PE

Models of reference-dependent preferences propose that individuals evaluate outcomes as gains or losses relative to a neutral reference point. We test for reference dependence in a large dataset of marathon finishing times (n = 9,524,071). Models of reference-dependent preferences such as prospect theory predict bunching of finishing times at reference points. We provide visual and statistical evidence that round numbers (e.g., a four-hour marathon) serve as reference points in this environment and as a result produce significant bunching of performance at these round numbers. Bunching is driven by planning and adjustments in effort provision near the finish line and cannot be explained by explicit rewards (e.g., qualifying for the Boston Marathon), peer effects, or institutional features (e.g., pacesetters). We calibrate a simple model of prospect theory as well as other models of reference dependence and show that the basic qualitative shape of the empirical distribution of finishing times is consistent with parameters that have previously been estimated in the laboratory.

You may purchase this paper on-line in .pdf format from ($5) for electronic delivery.

Access to NBER Papers

You are eligible for a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.


Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w20343

Users who downloaded this paper also downloaded* these:
Bisin, Gottardi, and Ruta w20345 Equilibrium Corporate Finance and Intermediation
Dragusanu, Giovannucci, and Nunn w20357 The Economics of Fair Trade
Parsons, Sulaeman, and Titman w20347 The Geography of Financial Misconduct
Hsiang and Jina w20352 The Causal Effect of Environmental Catastrophe on Long-Run Economic Growth: Evidence From 6,700 Cyclones
Acemoglu and Jackson w20369 Social Norms and the Enforcement of Laws
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us