Regulatory focus and utility in goal pursuit

This paper develops a riskless utility model for outcomes anticipated in a goal pursuit context. The purpose of the model is to provide a formal account of the process by which qualitatively different goals affect the assignment of utilities to outcomes that fall short of goal states but that also provide some degree of goal progress. The model presumes that the utilities for such outcomes follow a dual reference point function in which the utilities associated with positive discrepancies from a previous status-quo position compete with the disutilities of negative discrepancies from the goal as judgments about the outcomes' utilities are rendered. The function expresses the model's assumptions about this process by specifying the manner in which the discrepancies from the reference points are represented, the form of the component functions that are defined over those discrepancies, and the integration rule that is used to combine the outputs of the component functions. The model then applies the principles of Regulatory Focus Theory (RFT - Higgins, 1997, 1998) to understand how goals involving nurturance concerns (i.e., promotion goals), versus those involving safety/security concerns (i.e., prevention goals), affect the values of parameters that assign weights to outcome-goal versus outcome-status-quo discrepancies. The incorporation of RFT principles into the utility function leads to the expectation that the utilities for below-goal but above-status-quo outcomes follow a curve that changes shape from concave to convex as outcomes approach the goal, but that has an inflection point that comes sooner under a prevention goal than under a promotion goal---a difference that is shown to have important implications for promotion-prevention differences in responses to improvements in outcomes occurring under the different sections of the curves. Results reported from two studies using a utility rating task, along with the results from a willingness-to-expend-effort task, lend considerable support to the model and RFT-based predictions. The broader implications of the model for risk tolerance and for people's willingness-to-pay for incremental improvements in goods and services are subsequently discussed.