Sign effect
Gains are discounted more steeply than losses of the same size.
What it means
The sign effect is the finding that delayed gains are discounted more heavily than delayed losses of equal magnitude, so people are eager to receive rewards sooner but in no hurry to get unpleasant outcomes over with. Indeed, many people will pay to avoid speeding up a loss, preferring to defer a debt or a painful task even when delay is costly, which can imply a near-zero or negative discount rate for losses. This asymmetry mirrors the gain-loss asymmetry of prospect theory's value function carried into the time domain. Like the magnitude and delay-speedup effects, it breaks the single-rate assumption of discounted utility. It helps explain debt aversion in some contexts and the dread-driven postponement of bad news.
Examples
Offered $100 now or $120 in a year, many take the cash; but owing $100 now or $120 in a year, many would rather pay the larger sum later.
Told a dreaded root canal can happen this week or next month, many people book the later slot, even though waiting means weeks more toothache. The delay itself feels like the reward.
The same shopper who happily pays extra for next-day delivery leaves a parking fine sitting until the final due date. Pleasure is worth rushing forward; pain is not.
First described in Thaler (1981); Loewenstein & Prelec (1992).