ABSTRACT
In order to account for several anomalies in observed (economic) behavior under risk and uncertainty which are not in line with expected utility theory, Daniel Kahneman and Amos Tversky introduced Prospect Theory more than 40 years ago. Their seminal work was published in 1979 in Econometrica and distinguishes between two phases in the choice process, i.e., editing and evaluation. A major operation of the editing phase is coding of outcomes. Based on some empirical evidence, they reasoned on page 274 that “people normally perceive outcomes as gains and losses, rather than as final states of wealth or welfare. Gains and losses, of course, are defined relative to some neutral reference point.” Kahneman and Tversky already stated in their seminal work that Prospect Theory and the concept of reference point behavior are readily applicable to choices in various areas of life. In this chapter, I discuss the recently growing empirical evidence about the occurrence and relevance of reference points and reference point behavior in sports. While this review is not exhaustive, it follows the objective to cover at least the seminal works exploring the relevance of different reference points in different sport settings and (eventually) revealing some controversial findings. As such, I propose a structure along two distinct research lines. The first part is focused on athletes and coaches. The second part is focused on fans.
