Discounting the Past: Bad Weighs Heavier than Good

This paper introduces and tests the hypothesis that the effects of information with negative valence tend to fade away more slowly than the effects of information with positive valence, not only because their immediate impact may be stronger, but also because the two types of information are discounted differently. To empirically test this hypothesis, we designed three survey‐based randomized experiments, in which we manipulated the valence of the information that subjects are exposed to and the time to which such information refers. We measured how our subjects reacted to such information using judgment metrics derived from the literature or created ad‐hoc for our experiments. We used a difference‐in‐difference model to disentangle the effects of valence, time and their interaction. Our findings provide some empirical support for our hypothesis. We suggest the theoretical grounds that could motivate differential discounting, and the implications of such phenomenon in a society where negative and positive information about people is so easily retrievable.