Consumers Respond More to Negative News than Positive Info

Antonella Tutino

Economic Letter, 2018, vol. 13, issue 7, 4 pages

Abstract: Consumers, forced to navigate a constant stream of economic information, are often challenged to sort through details and respond to new material. Experiments suggest that people react more forcefully to negative income shocks than to positive ones. Size also matters: Reaction to small shocks is slower relative to the response to big shocks participation-rate decline.

Date: 2018
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