The effect of an increase in unit price on self-set goals in a success-based fee system: Gain and loss domains

In this study, we investigate earnings as a motivational tool on goal setting in economically equivalent gain and loss domains. The main finding indicates that a higher unit price, which corresponds to greater earnings, leads to a higher self-set goal in the Gain treatment but not in the economically equivalent Loss treatment. Using the reference-dependent utility model, one possible explanation is that in the loss domain, the positive effect of an increase in the unit price is weakened due to a corresponding change in the reference point formed by the initial endowment. Additionally, a higher unit price does not lead to greater performance in both the gain and loss domains. Finally, in the gain domain, our experiment finds that low rewards fail to motivate individuals to set goals that closely align with actual performance.